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_{#WinterSession2024}_{Finance Minister Nirmala Sitharaman Moves The Banking Laws (Amendment) Bill, 2024 for Consideration & Passing in #LokSabha}

The Indian Parliament is set to consider the Banking Laws (Amendment) Bill, 2024, aiming to overhaul banking regulations with provisions that could significantly affect Non-Resident Indians (NRIs). From new rules on account nominations to unclaimed asset transfers, here’s a breakdown of the most important points.

Flexible Nominations for Bank Accounts

The bill proposes enhanced flexibility for account holders, including NRIs, in nominating beneficiaries for their bank accounts. Here’s what’s changing:

Nominate Up to Four Individuals: Account holders can now choose multiple nominees.
Two Nomination Options:
1. Simultaneous Nominations: Allocate specific percentages of account balances to multiple nominees, ensuring proportional distribution.
2. Successive Nominations: Create a priority list of nominees, allowing for a pre-set order of inheritance if the primary nominee is no longer available.

Combination Allowed: NRIs can nominate their spouse as a primary beneficiary while setting successive nominees for children.

Important Note:

Items in safe custody with banks (e.g., valuables) can only be distributed through successive nominations.
For safe deposit lockers, the rules limit nominations to one person at a time.

Addressing Unclaimed Assets

The bill expands the scope of assets banks can transfer to the Investor Education and Protection Fund (IEPF) if they remain unclaimed for seven years.

Previously, this applied to unpaid dividends only. Now, the bill includes:

Shares with unpaid dividends: Both the shares and the unpaid dividends can be transferred to the IEPF.
Unclaimed bond interests or redemption proceeds: These assets, if left untouched for seven years, may also be sent to the IEPF.

Why This Matters for NRIs:
Ensure your contact details are updated with your bank to avoid losing track of your investments or inheritance. Reclaiming assets from the IEPF involves additional steps, which could be cumbersome.

Uniform Rules for All Account Holders

The bill doesn’t include specific provisions for NRIs, meaning the changes apply equally to residents and non-residents. NRIs must adapt to these general rules, especially when managing cross-border accounts and investments.

What’s Next?

The Banking Laws (Amendment) Bill, 2024, is a significant step toward modernizing India’s financial regulations. However, questions remain about how well it addresses the unique needs of NRIs.