The Banking Laws (Amendment) Bill along with the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2012, was on Wednesday passed by the Upper House of Parliament after a reply by finance minister P Chidambaram on the combined discussion on the Bills.
Chidambaram said that the Bills will strengthen the financial sector and help in establishing large-sized banks, besides promoting financial inclusion. The Banking Bill was approved by the Lok Sabha earlier this week after the government dropped the clause concerning allowing banks to trade in commodity futures. The new Bill allows the corporate houses to enter into the banking sector
“We need 2-3 world-sized banks. China has three among the world’s top 20. We have none. We need more banks,” Chidambaram said while replying before the Rajya Sabha.
“Banks have opened 6,489 branches in 2011-12 alone that is around 18-19 per day. We don’t have the capacity to open more branch. We need banks,” he said. Chidambaram said the amendment was not intended to give banking licences to big corporate houses alone, but also to allow eligible public sector entities to enter the sector.
Referring to today’s strike by bank unions against reforms, Chidambaram said, “I don’t know why they should go on strike. There is no longer greater public support for this (kind of) strike...I think any matter can be talked out. We are open to talks.”
... keeps Companies Bill on hold
The Companies Bill, 2011, which was passed by the Lok Sabha earlier this week in a late-night sitting, has missed the bus yet again this session. The Bill, which requires passage in both the Houses, could not be introduced in the Rajya Sabha today. The earliest the Bill can be introduced by the government again is the Budget session next year.
The Bill requires India Inc to spend at least 2 per cent of their net profit for socially responsible initiatives and empowers investors and shareholders.
The Bill also seeks to introduce for the first time the concept of class-action suit, which will help shareholders to sue companies against any fraud. It also strengthens the Serious Fraud Investigation Office (SFIO) to investigate wrongdoing of companies.
The new legislation will replace the 56-year old Companies Act and has 470 clauses, as against more than 600 clauses in the old Act. Changing the way corporates operate in the country, the Bill has made