THE BANKING LAWS (AMENDMENT) BILL, 2024

Every banking company is required to submit a return in a prescribed form and manner to the Reserve Bank, showing its assets and liabilities in India as at the close of business on the last Friday of every month. The return must include details of its demand and time liabilities in India on that day or the preceding working day if it falls on a public holiday under the Negotiable Instruments Act, 1881.

The Reserve Bank may specify the percentage of total demand and time liabilities that the banking company must maintain as a cash reserve with itself or by way of balance in a current account with the Reserve Bank or the State Co-operative Bank of the State concerned.

Co-operative banks are also required to submit a return showing their assets and liabilities, but with modifications. They must maintain a cash reserve with themselves or by way of balance in a current account with the Reserve Bank or the State Co-operative Bank of the State concerned, equivalent to such per cent. of the total of its demand and time liabilities as on the last Friday of the second preceding fortnight as specified by the Reserve Bank.

The State Bank of India Act, 1955 provides for the audit of the affairs of the State Bank by two or more auditors duly qualified to act as auditors of companies under section 226 of the Companies Act, 1956. The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980 also provide for the transfer of unpaid or unclaimed dividend to the Investor Education and Protection Fund established under sub-section (1) of section 205C of the Companies Act, 1956.

The Banking Regulation Amendment Bill, 2023 aims to amend the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.