Govt may introduce amendments to laws to push banking sector reforms
Parliament session beginning on July 22 would witness the Budget presentation on July 23
image for illustrative purpose
New Delhi: The government is likely to introduce amendments to Banking Regulation Act 1949 and other laws to push banking sector reforms during the upcoming Budget session.
Apart from this, amendments in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 are needed for privatisation of public sector banks, sources said. These Acts led to the nationalisation of banks in two phases and provisions of these laws have to be changed for the privatisation of banks, they said. Amendments, if approved by Parliament, would help bring down government holding in state-owned banks below 51 per cent, improve bank governance and enhance investors’ protection, sources said. Parliament session beginning on July 22 would witness the Budget presentation on July 23 and conclude with the passage of the Finance Bill on August 12.
It is to be noted that the government had listed amendment to these laws to be taken up during the winter session in 2021, but these bills could not be tabled. “To effect amendments in Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980 and incidental amendments to Banking Regulation Act, 1949 in the context of Union Budget announcement 2021 regarding privatisation of two Public Sector Banks,” as per the list of legislative business for the winter session.
Finance Minister Nirmala Sitharaman, while presenting the Budget for 2021-22, announced the privatisation of public sector banks (PSBs). “Other than IDBI Bank, we propose to take up the privatisation of two PSBs and one general insurance company in 2021-22,” she had said. To ensure privatisation of a general insurance company, the government has already received approval from Parliament for the General Insurance Business (Nationalisation) Amendment Bill, 2021, in the monsoon session ended in August 2021. The government in April 2020 consolidated 10 PSBs into four and as a result, the total number of PSBs came down to 12 from 27 in March 2017.
