Latest news with #PSBs
Mint
a day ago
- Business
- Mint
Key banking law changes to take effect on 1 Aug
Key provisions of the Banking Laws (Amendment) Act, 2025 including higher threshold for substantial interest, will come into effect on 1 August, the finance ministry said. The amended legislation aims to enhance bank governance, safeguard depositors and investors, improve audits at public sector banks, and increase the tenure of directors (other than the chairperson and whole-time directors) in cooperative banks. The Banking Laws (Amendment) Act, 2025 was notified on 15 April 2025, containing a total of 19 amendments across five legislations—the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949,State Bank of India Act, 1955 and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980. The central government had notified 1 August 2025 as the date on which the provisions of certain sections would come into force. Some of these include implementation of enhanced threshold for directorship in cooperative banks. The amendment redefined 'substantial interest' for directorships, which increased to ₹ 2 crore instead of the current limit of ₹ 5 lakh, which was fixed almost six decades ago. Further, these provisions in the law align director tenures in cooperative banks with the 97th Constitutional Amendment by increasing the maximum tenure from 8 years to 10 years (excluding the chairperson and whole-time director). Also, PSBs will now be permitted to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF), bringing them in line with practices followed by companies under the Companies Act. The amendments also empower PSBs to offer remuneration to statutory auditors, facilitating the engagement of high-quality audit professionals and enhancing audit standards. The implementation of these provisions marks a significant step towards strengthening the legal, regulatory, and governance framework of the Indian Banking Sector, the finance ministry statement said. The proposed changes in banking laws also revises the reporting dates for the submission of statutory reports by banks to the Reserve Bank of India from reporting every Friday to the last day of the fortnight, month or the quarter. The announcement about amending the Banking Regulation Act was made by the Finance Minister in the 2023-24 Budget speech. In fact the bill was first introduced on August 9, 2024 but could not be taken up for discussion and passage then. The Lok Sabha cleared the bill in December, 2024 while Rajya Sabha approved it with few amendments made by it on March 26. The Lok Sabha then approved it in April turning the bill into a law.
&w=3840&q=100)
Business Standard
a day ago
- Business
- Business Standard
Key amendments to banking laws come into force from August 1, 2025
Reforms under the 2025 banking law include governance changes, enhanced audit rules and stronger depositor protection for PSBs, cooperative and private banks New Delhi Major provisions of the Banking Laws (Amendment) Act, 2025 will come into effect from August 1, 2025, according to a government notification issued this week. The changes mark a significant push to strengthen governance standards, improve depositor protection and raise audit quality across India's banking sector. The Ministry of Finance, through Gazette Notification S.O. 3494(E) dated July 29, 2025, has notified the commencement of sections 3, 4, 5, 15, 16, 17, 18, 19 and 20 of the legislation, which was enacted on April 15, 2025. The Banking Laws (Amendment) Act, 2025 introduces a total of 19 amendments across five major laws—the Reserve Bank of India Act, 1934; Banking Regulation Act, 1949; State Bank of India Act, 1955; and the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980. Among the key reforms, the definition of 'substantial interest' has been significantly revised by raising the threshold from Rs 5 lakh to Rs 2 crore—a limit that had remained unchanged since 1968. To align with the 97th Constitutional Amendment, the tenure of directors (excluding chairpersons and whole-time directors) in cooperative banks has been increased from eight years to 10 years, ensuring greater consistency in board-level appointments. Public sector banks (PSBs) will now be allowed to transfer unclaimed shares, interest amounts and bond redemption proceeds to the Investor Education and Protection Fund (IEPF), aligning PSBs with provisions applicable to companies under the Companies Act. Another important measure enables PSBs to offer remuneration to statutory auditors—an effort aimed at enhancing the quality and independence of audits. The government stated that the implementation of these provisions represents a decisive move towards modernising the regulatory and governance framework of Indian banking and bringing it in line with evolving global best practices.
Time of India
a day ago
- Business
- Time of India
Public sector banks can transfer unclaimed shares, bond redemption amounts to IEPF from Aug 1
The government has notified amendments to the Banking Laws (Amendment) Act, 2025 which allows Public sector banks (PSBs) to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF), bringing them in line with practices followed by companies under the Companies Act. The amendments also empower PSBs to offer remuneration to statutory auditors, facilitating the engagement of high-quality audit professionals and enhancing audit standards, the Finance Ministry said in a statement on Wednesday. Explore courses from Top Institutes in Please select course: Select a Course Category Public Policy Technology Finance Cybersecurity MCA CXO PGDM Degree Digital Marketing healthcare Healthcare Artificial Intelligence Data Science MBA Others Design Thinking Operations Management Data Analytics Product Management Data Science Management Leadership others Project Management Skills you'll gain: Duration: 12 Months IIM Calcutta Executive Programme in Public Policy and Management Starts on undefined Get Details Skills you'll gain: Economics for Public Policy Making Quantitative Techniques Public & Project Finance Law, Health & Urban Development Policy Duration: 12 Months IIM Kozhikode Professional Certificate Programme in Public Policy Management Starts on Mar 3, 2024 Get Details Besides, the gazette notification dated July 29, 2025 has also enhanced the threshold of 'substantial interest' from Rs 5 lakh to Rs 2 crore. The threshold of 'substantial interest' has been amended after 1968. Additionally, it said, the notification aligns director tenures in cooperative banks with the 97th Constitutional Amendment by increasing the maximum tenure from 8 years to 10 years, excluding the chairperson and whole-time director. Live Events These amendments would come into effect from April 1, 2025, it said. The implementation of these provisions marks a significant step towards strengthening the legal, regulatory, and governance framework of the Indian banking sector, it said. The Banking Laws (Amendment) Act, 2025 was notified on April 15 2025, containing a total of 19 amendments across five legislations - the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949, State Bank of India Act, 1955 and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980. The Banking Laws (Amendment) Act, 2025 seeks to improve governance standards in the banking sector, ensure enhanced protection for depositors and investors, improve audit quality in public sector banks, and increase the tenure of directors (other than the chairperson and whole-time directors) in cooperative banks.
&w=3840&q=100)
Business Standard
2 days ago
- Business
- Business Standard
Four PSBs seek 1-year extension to comply with shareholding norms
As per SEBI norms, listed entities must reduce promoter shareholding to 75 per cent premium New Delhi Listen to This Article At least four public-sector banks (PSBs) — Indian Overseas Bank, UCO Bank, Punjab & Sind Bank, and Central Bank of India — have approached the Department of Financial Services (DFS), seeking a one-year extension to meet the Minimum Public Shareholding (MPS) requirement. These banks have expressed their inability to meet the current deadline of August 2026 via the qualified institutional placement (QIP) route. According to Sebi norms, listed entities must reduce promoter shareholding to 75 per cent. Of the 12 PSBs, seven have already met the MPS norms. The current government holdings in the five PSBs are: Indian Overseas Bank
Indian Express
2 days ago
- Business
- Indian Express
Public sector banks' MSME bad loans falling, Finance Ministry tells Rajya Sabha
India's public sector banks (PSBs) have been seeing a steady improvement in their MSME loan book – or loans given to Micro, Small, and Medium Enterprises – although credit extended to the smallest of these businesses has not witnessed a reduction in stress at the same rate, data shared by the finance ministry with the Parliament on Tuesday showed. Responding to a written question in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said that the gross non-performing asset (NPA) ratio of PSBs' MSME loans had declined to 6.18 per cent as at the end of 2024-25 from 7.99 per cent a year ago and 12.8 per cent at the end of March 2022. The fall in the gross NPA ratio was due to both, an increase in the loans extended to MSMEs as well as a fall in the absolute amount of bad loans. The gross NPA ratio is calculated by dividing the quantum of loans gone bad – loans that are not being paid back – by the total amount of loans outstanding. For instance, loans given by state-owned banks to MSMEs stood at Rs 13.07 lakh crore as on March 31, up 11.3 per cent year-on-year. At the same time, the value of these loans that had become non-performing – or were not being repaid – was down 14 per cent from a year ago at Rs 80,749 crore. While the absolute amount of PSBs' bad loans within the MSME sector is down 22 per cent compared to March 2023, the decline has primarily been driven by small and medium enterprises. As on March 31, bad loans to small enterprises stood at Rs 19,677 crore, down 28 per cent year-on-year and 39 per cent from March 2023. For medium-sized enterprises, PSBs' bad loans stood at Rs 8,553 crore as at the end of the last financial year, down 30 per cent year-on-year and 46 per cent compared to two years ago. However, the decline in NPAs for micro enterprises has been considerably smaller. This is a worry as the quantum of bad loans among micro enterprises is much higher. As per the data, PSBs' bad loans to micro enterprises stood at Rs 52,519 crore as at the end of 2024-25, down 3 per cent year-on-year and 7 per cent compared to March 2023. '…the incidence of NPAs in lending by banks, inter alia in the MSME sector, is attributable to a number of factors, which include overall performance of the borrowing entity, macroeconomic conditions, sectoral issues, global business environment, etc,' Chaudhary said in his response on Tuesday. Lending to micro enterprises has been a problem for the entire industry, but particularly for state-owned banks. The Reserve Bank of India (RBI) last month said in its most recent Financial Stability Report that credit to these micro enterprises, which formed 49 per cent of total MSME credit, saw weaker incremental growth in 2024-25 compared to small and medium businesses. 'In terms of amount outstanding, the share of sub-prime borrowers in the MSME portfolio of the SCBs (scheduled commercial banks) has decreased from 33.5 per cent in June 2022 to 23.3 per cent in March 2025. PSBs, however, had a higher share of sub-prime borrowers in their MSME portfolio compared to PVBs (private banks) and NBFCs (non-banking financial companies),' the RBI had said. A sub-prime borrower is one who is viewed as a risk due to a non-existent or poor track-record of paying back loans. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More
