Lok Sabha okays Banking Laws(Amendment) Bill, 2011: 2 changes
The Lok Sabha today passed the Banking Laws (Amendment) Bill, 2011, with several official modifications and dropping two controversial clauses relating to banks entry into speculative business and to bank mergers matters being taken out of the purview of the Competition Commission of India.
The Bill seeks to strengthen the regulatory powers of the Reserve Bank of India. It aims to address the issue of capital raising capacity of banks in India.
This Bill was first introduced in 2005 but lapsed with the dissolution of the 14th Lok Sabha.
The Bill was introduced in the Lok Sabha on March 22, 2011 by the Minister of Finance, Pranab Mukherjee.
The Bill seeks to amend the Banking Regulation Act, 1949, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
The Bill seeks to strengthen the banking institutions through consolidation and subjecting them to more competition, The Amendment Bill had earlier also provided that banks would be allowed to invest their money in speculative business, and that the issue of merger of banks would be taken out of the purview of the Competition Commission of India, but following the stiff opposition by the Left, Trinamool and other Opposition parties, Finanace Minister P Chidambaram dropped the related clauses.