Banking Laws (Amendment) Act, 2025 Comes Into Force from August 1 With Major Governance Reforms

The Banking Laws (Amendment) Act, 2025 will come into force from August 1, bringing significant changes across India’s banking sector.

The amendments span five major laws, including the Banking Regulation Act and the Reserve Bank of India Act. Key changes include raising the threshold for “substantial interest” in cooperative banks to ₹2 crore and extending director tenure in cooperative banks to 10 years, excluding chairpersons and full-time directors.

Public sector banks can now transfer unclaimed investor funds to the Investor Education and Protection Fund (IEPF) and pay statutory auditors directly. RBI reporting requirements have also been eased by replacing weekly submissions with fortnightly or monthly reports.

The reforms aim to strengthen governance, improve audit standards, and safeguard depositors. The Act was notified on April 15, 2025..