Govt Sets Aug 1 as Start Date for Revised Substantial Interest Limit
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- Last Updated on 31 July, 2025
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Notification S.O. 3494(E); Dated: 29.07.2025
Central Government Notifies Effective Date for Banking Laws (Amendment) Act, 2025
The Central Government has taken the next step in implementing the Banking Laws (Amendment) Act, 2025, by officially notifying August 1, 2025, as the date from which key provisions of the Act will come into force. This includes sections 3, 4, 5, 15, 16, 17, 18, 19, and 20 of the amended legislation, marking a significant milestone in modernising India’s banking regulatory framework.
Key Sections Brought into Force
With the latest notification, the Government has operationalised several critical sections of the amended Act. These provisions aim to strengthen the oversight and governance of the banking sector, improve regulatory clarity, and align the law with evolving economic conditions and financial practices.
Revision in Definition of ‘Substantial Interest’
One of the most significant changes under the amendment is the revision of the threshold for determining “substantial interest” in relation to a company under the Banking Regulation Act, 1949. Previously set at ₹5 lakh, the threshold has now been revised to ₹2 crore or 10% of the paid-up capital of the company, whichever is lower. This change is expected to better reflect the scale of modern corporate structures and ensure a more meaningful assessment of ownership influence.
Enhancing Regulatory Precision and Financial Oversight
The updated threshold for substantial interest will enable regulators to more accurately assess control and influence in companies dealing with banking institutions. This revision is part of broader efforts to ensure financial stability, reduce risk concentration, and improve transparency in the financial ecosystem. The implementation of the Banking Laws (Amendment) Act, 2025, represents a proactive step by the Government to strengthen the regulatory architecture of India’s banking sector.
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