Parliament passed a bill on Tuesday aimed at drawing foreign investment to the banking sector by increasing shareholders' voting rights, after dropping a controversial clause allowing banks to trade in commodity futures.The Banking Amendment Bill, a major reforms legislation, today got approval of the Lok Sabha after the government dropped the controversial provisions relating to allowing banks to trade in futures and keeping the sector outside the purview of Competition Commission.
"Since the bill is too important for me to pass, therefore I am bringing the Bill dropping the controversial clauses," Finance Minister P Chidambaram said, winding up the discussion on the Banking Laws (Amendment) Bill, 2011.
The Bill, which seeks to strengthen banking regulation , was later passed by the voice vote after the amendments proposed by the Left Parties were rejected by the House.
The Bill, along with proposed legislations on pension and insurance, was one of the five key reforms measures on the government's agenda during the current session of Parliament.
The government dropped the controversial changes in the Bill in deference to the wishes of Opposition, the Minister said, adding it has accepted all major recommendations of the Standing Committee on Finance.
On the proposal to allow banks to participate in the commodity futures trading, he said, it was based on the recommendations of the Standing Committee on Food and Consumer Affairs and report of the Reserve Bank's working group.
As regards other issues, he said, while RBI would regulate the banking sector, the Competition Commission of India (CCI) would look into competition practices in the banking sector.
The Minister also expressed the commitment of the government to infuse Rs 15,000 crore into public sector banks in the current financial year and retain their basic character.
The Banking Bill also seeks to raise the voting rights of investors in private sector banks to 26 per cent, from 10 percent. It also allows RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in PSBs to 10 per cent, from 1 per cent.
On concerns of members that banking reforms would lead to job losses, the Minister said public sector banks would be hiring about 84,500 people this year and 6,000 branches would be opened every year.
"I cannot foresee our banks retrenching anyone. In fact we will recruit many more," Chidambaram said. He said the Justice B N Srikirishna Committee has given its draft report and once the final report comes, the government would come out with a comprehensive banking law.
On consolidation in the banking sector, Chidambaram said India will need 2-3 world class banks and there would still be over 20 PSBs after mergers. Private sector banks are growing, he said, adding there was no reason why the PSBs should not be encouraged to grow.
Describing the rising NPAs as a matter of concern, but not alarm, Chidambaram said, "This is not the time to tighten the screws. They are not willful defaulters. This is the time to restructure loans." Rejecting opposition's charge that 'Manmohan-Chidambaram' economic policies were responsible for slowdown, the Minister said, "Do not equate me with Manmohan Singh. I do not have his vast experience.
"Manmohan model showed that we can achieve 9 per cent growth. It also showed how to reduce fiscal deficit. Manmohan model must also be credited for making India the second fastest growing economy," he said.
Opposing the consideration of the Bill in the current session, Rajnath Singh said the Bill is being moved when the session is coming to an end in two days.
"This is not a simple Bill. It should not be hurried through. Had it been brought at the beginning of this session, we would have agreed to a discussion. Moreover, not all recommendations of the Standing Committee have been accepted in the Bill. So either the session should be extended or the Bill brought in the next session," Singh said.
Mulayam Singh Yadav (SP) spoke on similar lines and said the law will have an impact on farmers. "We want this Bill be taken up in the next session. It is an important Bill as land under agriculture is going down while the population is growing. The Bill should be discussed in the next session," he said.
Pressing for deferment of the Bill, Acharia complained that copies of the proposed legislation were circulated to members only this afternoon and it has been brought hurriedly before the House. He pointed out that 155 amendments have been moved with the Bill.
Saugata Roy said the Land Acquisition Bill was not mentioned in today's list of business and only one day was given to study the amendments.
He said the Bill had gone to the Standing Committee earlier but all its recommendations have not been included. Hence it should be discussed in the next session.
0 comments:
Post a Comment
Let Us Know Your Opinion!