The wait for banking licence continues for leading business groups like Reliance, Mahindra & Mahindra, the Tatas and L&T as an uproar by the Opposition on consideration of Banking Laws (Amendment) Bill led to the Lok Sabha being adjourned abruptly for the day.
The RBI had said that it would consider issuing new bank licences only after the Bill is enacted and it is given the powers to supersede bank boards, among other things.
Interestingly, after being on the losing side in the vote for FDI in retail, the BJP shared an unusual bonhomie with the Left and TMC while coming together to oppose the Bill. They demanded that the Bill be referred to the Parliamentary Standing Committee.
Claiming that the Bill, as proposed to be tabled, included some changes from the version vetted and commented on by the Parliamentary Standing Committee on Finance, the combined opposition demanded that it be examined again by the committee.
Finance Minister P Chidambaram had even stood up expressing his willingness to give a response, but could not be heard due to the din.
The Bill, which seeks to give more teeth to the RBI, also seeks to amend the banking laws hiking the cap on voting rights of shareholders of nationalised banks to 10% from 1%. It also seeks to do away with the current curbs on voting rights restricted to 10% of the total voting rights of a banking company’s shareholders. If the Bill had got the Parliamentary nod, the ceiling on voting rights for investors in private banks, including ICICI Bank and HDFC Bank, would go up to 26% from 10%, and in PSBs, such as SBI, to 10% from the current 1%.
