Things to Know: Banking Laws (Amendment) Act, 2025

The Banking Laws (Amendment) Act, 2025, is a significant legislative update that aims to modernize India’s banking framework. Here are the key highlights:

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Key Amendments

Definition of Fortnight: The Act updates the definition of “fortnight” to mean the period from the 1st to the 15th day of each calendar month or from the 16th to the last day of the month. This change standardizes timelines for operational activities, enhancing consistency across financial operations.

Minimum Capital Requirement: The minimum capital required for certain banking activities has been increased significantly from ₹5 lakh to ₹2 crore or an amount notified by the Central Government in the Official Gazette.

Directorial Tenure in Cooperative Banks: The amendment revises the tenure for directors of cooperative banks, allowing them to serve up to 10 years, extending the previous limit of 8 years.

Nomination Changes: The Act now allows up to 4 nominees to be nominated for a single account or deposit. If more than one nominee is chosen, the proportion of the share for each nominee must be specified.

Changes in Various Acts

Reserve Bank of India Act, 1934: The amendment updates the definition of “fortnight” and changes the reporting timeline from alternate Fridays to the last day of each fortnight.

Banking Regulation Act, 1949: The Act increases the minimum capital requirement, extends the tenure for directors in cooperative banks, and revises the procedures for statutory returns and reserve maintenance.

State Bank of India Act, 1955: The amendment mandates the transfer of unclaimed dividends, shares, and bond proceeds to the Investor Education and Protection Fund after 7 years, aligning it with the Companies Act, 2013.

Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980: Similar provisions are included for nationalized banks under these Acts, regarding unclaimed funds and auditor appointments ¹ ².