Question 1

The government has altered the CRR percentage requirements for all commercial banks through this bill.

Accepted Answer

The amendment does not change the CRR percentage or the monetary policy itself. It only redefines the 'fortnight' period over which the average daily balance for CRR is calculated.

Question 2

The 'substantial interest' threshold was raised to Rs. 2 crore or 20 percent of a company's paid-up capital.

Accepted Answer

The monetary threshold was raised from Rs. 5 lakh to Rs. 2 crore, but the percentage limit strictly remains at 10 percent of the paid-up capital.

Question 3

Consider the following statements regarding the Banking Laws (Amendment) Bill, 2024:
1. It amends the Banking Regulation Act, 1949, to permit a bank account holder to appoint up to four nominees, either simultaneously or successively.
2. It redefines a 'fortnight' for the maintenance of Cash Reserve Ratio (CRR) to align strictly with the first and second halves of a calendar month.
3. It increases the percentage limit defining 'substantial interest' in a company from 10 percent to 15 percent of paid-up capital.
How many of the statements given above are correct?

Accepted Answer

(b) Only two — Statements 1 and 2 are correct. The bill amends the Banking Regulation Act to allow up to 4 nominees and the RBI Act to redefine a fortnight as the 1st to 15th, or 16th to the last day of a month. Statement 3 is incorrect because while the monetary limit for substantial interest was raised from Rs. 5 lakh to Rs. 2 crore, the percentage threshold remains at 10 percent of paid-up capital.

Question 4

Match List I (Provision changed by the Banking Laws Amendment Bill) with List II (Statute Amended):
List I:
A. Maintenance of Cash Reserve Ratio (CRR) by scheduled banks
B. Limit on the tenure of cooperative bank directors
C. Transfer of unclaimed dividends to the IEPF

List II:
1. Banking Regulation Act, 1949
2. Reserve Bank of India Act, 1934
3. State Bank of India Act, 1955 and Bank Nationalisation Acts

Accepted Answer

(a) A-2, B-1, C-3 — A pairs with 2: The mandate for scheduled banks to maintain CRR is governed by Section 42 of the Reserve Bank of India Act, 1934. B pairs with 1: Director tenure for cooperative banks falls under Section 10A of the Banking Regulation Act, 1949. C pairs with 3: The transfer of unclaimed assets to the IEPF modifies the State Bank of India Act, 1955, and the Bank Nationalisation Acts of 1970 and 1980.

Question 5

Assertion (A): The Banking Laws (Amendment) Bill, 2024 increased the maximum tenure of directors of cooperative banks (excluding chairpersons) from 8 years to 10 years.
Reason (R): The amendment was designed to align the tenure of cooperative bank directors with the Constitutional framework established by the 97th Constitutional Amendment Act.

Accepted Answer

(a) Both A and R are true and R is the correct explanation of A. — Both statements are factually correct. Section 10A of the Banking Regulation Act was amended to increase the cooperative bank director tenure to 10 years. This was explicitly done to align the terms with the Constitution (Ninety-Seventh Amendment) Act, 2011, which stipulates five-year terms for cooperative society boards, thus allowing a director to serve exactly two full consecutive terms (10 years).

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