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Banking Laws Amendment Bill Passed In Lok Sabha

She also noted that all public sector banks have turned profitable and that the overall profitability of scheduled commercial banks has reached its highest point in decades, with a Return on Assets at 1.3 per cent and Return on Equity at 13.8 per cent.

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Union finance minister Nirmala Sitharaman in Lok Sabha

Finance Minister Nirmala Sitharaman addressed the Lok Sabha on Tuesday, discussing the positive performance of India's banking sector, especially public sector banks, under the Modi government. In her remarks, Sitharaman highlighted the growing profitability of banks and their expanding reach, with the number of bank branches increasing by 3,792 to 1,65,501 by September 2024.

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Sitharaman emphasized the remarkable performance of Indian banks, stating, "Highest-ever net profit of Rs 1.41 lakh crore was achieved in 2023-24 and Rs 85,520 crore in the first half of 2024-25." She also noted that all public sector banks have turned profitable and that the overall profitability of scheduled commercial banks has reached its highest point in decades, with a Return on Assets at 1.3 per cent and Return on Equity at 13.8 per cent.

Addressing the critics of the PM Jan Dhan Yojana, Sitharaman stated, "At that point of time, it was termed as a useless exercise (by critics). Today, we have Rs 2.37 lakh crore deposited in the PM Jan Dhan Accounts." She further explained that the average balance in these accounts has risen from Rs 1,065 in March 2025 to Rs 4,397. Sitharaman pointed out that the nationalization of banks has successfully reached rural areas, fulfilling its original purpose through the Jan Dhan initiative.

The Finance Minister also pointed to the growth in the number of bank branches, which has increased by 3,792 in one year, reaching a total of 1,65,501 by September 2024, with 85,116 branches being public sector banks.

She underscored the professionalism in the management of these banks, stating, "Banks are being professionally run today. The metrics are healthy so they can go to the market and raise bonds, raise loans and run their business accordingly."

Sitharaman indirectly criticized the Congress-led UPA government’s approach to bank lending, asserting, "Since 2014 we have been extremely cautious, so that banks remain stable." She stressed that the current government's focus has been on maintaining stability and health in the banking system.

Sitharaman also responded to interruptions from opposition members, specifically targeting the DMK's stance on the teaching of Hindi. Referring to Congress, she remarked, "It should ask its ally in Tamil Nadu about its stance against teaching of Hindi," and addressed the DMK’s opposition to Hindi by recounting her own experience of wanting to learn the language but being unable due to the party’s views.

In the debate, Congress and DMK members raised concerns about the government’s policies and their impact on the common people. Congress member Gaurav Gogoi criticized the current banking system, claiming it was unfair and broken. He pointed out issues such as farmers not getting loans due to poor credit ratings and students from SC/ST communities facing difficulties in securing student loans. He also claimed that poor and middle-class individuals, who lack land as collateral, are struggling to access loans for startups.

In response, Sitharaman defended the government’s approach, particularly highlighting the growth in bank branches and the professional management of public sector banks.

The Banking Laws (Amendment) Bill 2024, which was later passed, aims to improve governance standards in the Indian banking sector and enhance consumer convenience regarding nominations and investor protection.

Among the proposed changes, the Bill includes provisions for up to four nominees for depositors and an increase in the tenure of directors in cooperative banks from eight to ten years. Other key amendments focus on consistency in reporting by banks to the Reserve Bank of India (RBI) and enhanced protection for depositors and investors.

Sitharaman also addressed provisions related to cooperative banks, proposing that a director of a central cooperative bank could also serve on the board of a state cooperative bank. The Bill also seeks to redefine "substantial interest" in a company, raising the threshold for shareholding from Rs 5 lakh to Rs 2 crore.

Earlier in the session, opposition members clashed with the government over the disbursal of funds under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), with TMC MP Kalyan Banerjee alleging that the West Bengal government had not received due funds. Union Rural Development Minister responded, stating that funds could be withheld if not spent for the designated purpose.

The Lok Sabha session resumed after a week's deadlock, with the opposition demanding discussions on various issues, including the Adani controversy, the Manipur situation, and the Sambhal violence.

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Nirmala Sitharaman Lok Sabha Banking Laws Amendment Bill