Banking Laws (Amendment) Bill 2024 – Amendments related to auditor’s remuneration to be decided by bank
The Banking Laws (Amendment) Bill 2024 has bene presented in Lok Sabha. It proposes certain amendments to provisions related to auditor’s remuneration.
As per Statement of Objects and Reasons of the Banking Laws (Amendment) Bill 2024, it seeks inter alia, to improve governance standards, provide consistency in reporting by banks to the Reserve Bank of India, ensure better protection for depositors and investors, improve audit quality in public sector banks, bring customer convenience in respect of nominations and to provide for increase in the tenure of the directors in co-operative banks.
Among others, it is proposed to amend section 41 of the State Bank of India Act, 1955, section 10 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and section 10 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, so as to provide discretion to public sector banks in the matter of remuneration of auditors.
The relevant clause of the Bill with respect to proposed amendments in auditor’s remuneration are as under:
| Act | Existing clause | Amended clause |
| The State Bank of India Act, 1955. Amendment to section 41(2) | The auditors shall receive such remuneration as the Reserve Bank may fix in consultation with the Central Government | The auditors shall receive such remuneration as the State Bank may fix |
|
The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. Amendment to Section 10(2) |
Every auditor of a corresponding new bank shall be a person who is qualified to act as an auditor of a company under section 226 of the Companies Act, 1956 (1 of 1956), and shall receive such remuneration as the Reserve Bank may fix in consultation with the Central Government | Every auditor of a corresponding new bank shall be a person who is qualified to act as an auditor of a company under 141 of the Companies Act, 2013 and shall receive such remuneration as the corresponding new bank may fix |
|
The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. Amendment to section 10(2) |
Every auditor of a corresponding new bank shall be a person who is qualified to act as an auditor of a company under section 226 of the Companies Act, 1956 (1 of 1956), and shall receive such remuneration as the Reserve Bank may fix in consultation with the Central Government | Every auditor of a corresponding new bank shall be a person who is qualified to act as an auditor of a company under 141 of the Companies Act, 2013 and shall receive such remuneration as the corresponding new bank may fix |
Banking Laws (Amendment) Bill 2024 Click here >>
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