Banking Laws Amendment Act 2025: What Changed

Last reviewed: 3 September 2026.

A bank law that has been passed is not the same thing as a bank law that is in force. The Banking Laws Amendment Act, 2025 is a good example, because Parliament left it to the Central Government to decide when each part would start, and the Government has been switching it on in tranches. Knowing which tranche is live matters if you are relying on it.

This is the single most useful thing to take away. A provision of this Act binds nobody until a notification appoints its date. If someone tells you a part of this Act applies to you, ask which notification brought that section into force.

The Act contains 19 amendments spread across five separate banking statutes:

• The Reserve Bank of India Act, 1934
• The Banking Regulation Act, 1949
• The State Bank of India Act, 1955
• The Banking Companies Acquisition and Transfer of Undertakings Act, 1970
• The Banking Companies Acquisition and Transfer of Undertakings Act, 1980

Because the amendments are scattered, the Act itself is not where you read the current law. You read the amended parent Act. The Banking Laws Amendment Act, 2025 only tells you what was changed and, with the commencement notification, from when.

Substantial interest moved from Rs 5 lakh to Rs 2 crore. The threshold that defines when a person is treated as having a substantial interest in a concern was raised from Rs 5 lakh to Rs 2 crore. This limit had remained unchanged since 1968. The concept matters in bank governance because it is used to test the interests of directors and their relatives, so a figure fixed in 1968 had long stopped reflecting real values.

Cooperative bank director tenure went from 8 years to 10 years. The maximum tenure for directors of cooperative banks, other than the chairperson and a whole-time director, was raised from 8 years to 10 years. The stated purpose is to align the tenure with the 97th Constitutional Amendment.

Public sector banks can send unclaimed money to the IEPF. Public sector banks are now permitted to transfer unclaimed shares, unclaimed interest and unclaimed bond redemption amounts to the Investor Education and Protection Fund, bringing them in line with the practice already followed by companies under the Companies Act. This is the change most likely to touch an ordinary household, and it is explained further below.

Public sector banks can pay their statutory auditors. The Act empowers public sector banks to offer remuneration to statutory auditors, with the stated aim of attracting better audit professionals and improving audit quality.

If money of yours sat with a public sector bank and was never claimed, for example bond interest or a redemption amount or shares, that money does not disappear when it is transferred to the Investor Education and Protection Fund. A transfer changes where you go to claim, not whether you can claim.

The practical consequence is that a search at the bank alone may no longer be the whole picture for older unclaimed amounts. If a bank tells you it no longer holds the money, the next question to ask, in writing, is whether it was transferred, when, and under what reference. Our guide to the new common portal for unclaimed financial assets explains where each asset class is traced, and the IEPF route for shares and dividends covers that side.

We are deliberately not putting a form number, a fee or a processing time on this page, because those sit in subordinate rules that we did not verify for this article. Get them from the institution in writing, using the RTI route below.

1. Identify the exact section, not the Act. Work out which section of the parent Act your question turns on, since this amending Act only edits other statutes.
2. Check whether that section is in force. Only sections 3, 4, 5, 15, 16, 17, 18, 19 and 20 of the amending Act were brought into force on 1 August 2025. For anything else, look for a later gazette notification appointing its date.
3. Read the amended parent Act, not the amendment. The operative text lives in the Banking Regulation Act, 1949 or whichever parent statute was amended.
4. Ask the bank in writing. For a specific account, holding or unclaimed amount, put the question to the bank in writing and keep the acknowledgement.
5. Escalate through RTI if the bank does not answer. Public sector banks are public authorities for RTI purposes. Use the sample letter below.
6. Keep the gazette reference on file. If a bank or an official asserts a change, ask for the notification number. For this tranche it is S.O. 3494 E dated 29 July 2025.

To
The Central Public Information Officer
[Name of the public sector bank]
[Head office address]

Subject: Information under Section 6(1) of the Right to Information Act, 2005
regarding an unclaimed amount and any transfer to the IEPF

Sir/Madam,

I am the [account holder / registered holder / legal heir of the late
                     ], in respect of [account / folio / bond reference:
                     ]. Proof of my identity and entitlement is enclosed.

Please provide the following information:

1. Whether any unclaimed amount, unclaimed interest, unclaimed bond
   redemption amount or unclaimed shares stands or stood to the credit of
   the above holder in your records.

2. If any such amount has been transferred out of the bank, the date of
   transfer, the fund or authority to which it was transferred, and the
   reference number under which it was transferred.

3. A copy of the bank's current internal circular or policy governing the
   transfer of unclaimed shares, interest and bond redemption amounts to
   the Investor Education and Protection Fund.

4. The procedure and the list of documents required for a claimant or a
   legal heir to recover the said amount, and the office to apply to.

If any part of this request is held by another public authority, please
transfer that part under Section 6(3) of the RTI Act, 2005 within five days.

I enclose the prescribed application fee. Please supply the information
within 30 days as required by Section 7(1).

Yours faithfully,
[Name]
[Full postal address]
[Phone / email]
[Place, Date]

If nothing arrives within 30 days, that silence is a deemed refusal and you may file a first appeal under section 19(1). The Timeline Tracker will compute your appeal dates, and the AI RTI Drafter will format the application.

• Treating the whole Act as live from 15 April 2025. That is the notification date of the Act. Only the nine sections listed above started on 1 August 2025.
• Assuming a press summary equals the statutory text. A summary tells you the intent. The binding words are in the amended parent Act.
• Reading substantial interest as a limit on your own borrowing. It is a governance threshold used to test interests in bank lending decisions, not a cap on what an ordinary customer may borrow.
• Believing unclaimed money is forfeited on transfer. A transfer to the IEPF changes the claim route. It does not extinguish a rightful claim.
• Not asking for the notification number. If a change is asserted, the gazette reference is the fastest way to check it.
• Confusing this with the bank nomination changes. Nomination is dealt with separately. See bank nomination rules and multiple nominees.

No. The Act was notified on 15 April 2025, but it comes into force only on dates appointed by the Central Government, and different dates may be appointed for different provisions. Sections 3, 4, 5, 15, 16, 17, 18, 19 and 20 were brought into force from 1 August 2025 by S.O. 3494 E dated 29 July 2025.

Gazette notification S.O. 3494 E dated 29 July 2025. It appointed 1 August 2025 as the date for sections 3, 4, 5, 15, 16, 17, 18, 19 and 20 of Act 16 of 2025.

It is the threshold used to decide when a person is treated as having a substantial interest in a concern, which matters when testing the interests of bank directors and their relatives. It was raised from Rs 5 lakh to Rs 2 crore because the earlier figure had remained unchanged since 1968.

No. It is a governance threshold inside banking law, not a cap on an ordinary customer's borrowing. Do not read it as a personal lending limit.

The maximum tenure for directors other than the chairperson and a whole-time director was raised from 8 years to 10 years, stated to be for alignment with the 97th Constitutional Amendment.

No. A transfer changes the route you use to claim, not your entitlement. Ask the bank in writing whether a transfer happened, when, and under what reference, and what a claimant or legal heir must file.

It contains 19 amendments across five statutes: the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, and the Banking Companies Acquisition and Transfer of Undertakings Acts of 1970 and 1980.

Public sector banks are public authorities and answer RTI applications. A private bank is generally not a public authority, so the practical route there is the bank's own grievance channel and then the Reserve Bank's ombudsman mechanism. Start with how to file an RTI in India.

• Press Information Bureau, Ministry of Finance, Key Provisions of the Banking Laws Amendment Act, 2025 to come into effect from 1st August 2025 - Release ID 2150371, posted 30 July 2025. Source for the 1 August 2025 commencement, S.O. 3494 E dated 29 July 2025, the list of sections, the Rs 5 lakh to Rs 2 crore change, the 8 to 10 year tenure change, the IEPF transfer power and the auditor remuneration power.
• Gazette notification S.O. 3494 E dated 29 July 2025 as linked by the Press Information Bureau release above.
• Gazette notification of the Banking Laws Amendment Act, 2025 dated 15 April 2025 as linked by the same release.
• The Right to Information Act, 2005 - sections 6(1), 6(3), 7(1) and 19(1) used in the sample letter.

• Bank nomination rules 2025 and multiple nominees
• The common portal for unclaimed financial assets
• Claiming unclaimed shares and dividends through IEPF
• UDGAM search for unclaimed bank deposits
• How to file an RTI in India
• AI RTI Drafter
• The RTI Playbook