Page 7 - Banking Finance October 2024

BANK UPDATE

searches also uncovered incriminating
materials, including mobile phones and Union Bank Joins Global Carbon Accounting Initia-
digital devices, during raids conducted tive
under the Prevention of Money Laun- Union Bank of India has become the first major Indian bank to sign on to
dering Act (PMLA).
the Partnership for Carbon Accounting Financials (PCAF), a global initiative
aimed at developing a standardised approach to measuring and disclosing
Bill Proposes Up to Four greenhouse gas emissions associated with financial services.
Nominees for Bank De- This move aligns with the bank's commitment to managing climate risks and
posit and Locker Holders follows recent draft guidelines from the RBI on climate risk disclosures. By
Bank deposit and locker holders in In- joining PCAF, Union Bank reinforces its dedication to assessing the environ-
dia may soon be able to nominate up mental impact of its lending and investment activities, a crucial step in cli-
to four individuals, as per a new provi- mate risk management for the financial sector.
sion in the Banking Laws (Amendment)
Bill introduced in the Lok Sabha. This
proposal aims to improve governance Since its inception in 2014, the number called the initial skepticism surround-
and consistency in reporting by banks of accounts under PMJDY has grown ing the scheme but noted its success
to the Reserve Bank of India (RBI), nearly fourfold, reaching 53.13 crore in integrating the poor into the formal
ensuring better protection for deposi- as of August 2024, with total deposits banking system, thereby reducing their
tors and investors. surpassing Rs. 2.31 lakh crore. The Fi- vulnerability to loss, theft, and preda-
nance Ministry aims to cover all re- tory lending.
The Bill seeks to amend multiple acts, maining adults and newly eligible indi-
including the Banking Regulation Act viduals under the scheme. Sitharaman
of 1949, to facilitate the addition of IBA to Address Foreign
more nominees for the release of de- highlighted that 80% of PMJDY ac-
counts are active, with the average Banks' Data Storage Con-
positors' funds, safety locker contents,
and articles kept in safe custody with balance increasing to Rs. 4,352 in 2024 cerns with RBI
banks. Currently, banks allow only one from Rs. 1,065 in 2015. The Indian Banks' Association (IBA) is
nominee for these purposes. Other set to discuss the concerns of foreign
provisions in the Bill address the exten- PM Modi Criticizes Con- banks regarding mandatory local data
sion of director tenures in cooperative storage with the Reserve Bank of In-
banks and enhanced audit quality in gress for Delayed Banking dia (RBI). Foreign banks operating in
public sector banks. Access for the Poor India are required to store payment
Prime Minister Narendra Modi criti- data within the country starting Janu-
Government Targets Over cized the Congress party for failing to ary 2025, as mandated by an RBI cir-

3 Crore New PM Jan Dhan provide banking access to the poor, cular issued in April 2018.
despite nationalizing banks decades While some foreign banks have ad-
Accounts in FY25 ago. On the 10th anniversary of the
The government plans to open more Pradhan Mantri Jan Dhan Yojana justed their systems to comply with the
directive, others are finding it difficult
than 3 crore new accounts under the (PMJDY), Modi stated that while banks to move their historical payment data
Pradhan Mantri Jan Dhan Yojana were nationalized in the name of the to India. The RBI has stipulated that if
(PMJDY) in the financial year 2024-25, poor, it was only under his government
according to Finance Minister Nirmala that millions gained access to banking payment data is processed abroad, it
Sitharaman. Marking the 10-year an- services. must be deleted from foreign servers
niversary of the PMJDY, Sitharaman and stored locally within 24 hours. The
emphasized that the scheme has sig- In a blog post, Modi emphasized that IBA will inform the RBI that foreign
nificantly expanded financial inclusion the Jan Dhan scheme has transformed banks are gradually implementing lo-
by connecting millions of people, par- the lives of SC, ST, and OBC families by cal data storage systems, though chal-
ticularly those in need of financial as- providing them with access to savings, lenges remain in transferring older
sistance. credit, and financial security. He re- data.

BANKING FINANCE | OCTOBER | 2024 | 7