Outgoing department of financial service secretary DK Mittal (demitted office on Thursday), said the government is committed to push through pension and insurance reform Bills in the budget session of Parliament. In a candid interview with Arun S & Sunny Verma, Mittal brushed aside criticism of the government micro-managing banks, saying, instead it helped to improve the financial institutions in the country.
When can we expect final banking licence norms?
The government has sent its comments and clarifications. Now, RBI would take one or two weeks to finalise the same.
Are you also open to consider giving licences for setting up of small banks?
We have requested RBI to have a policy framework for all level of banks — local banks, regional banks, national banks and global banks. This framework will enable banks to move from a lower level to higher level.
Are there differences between RBI and government, especially on issuing licences to industrial houses?
No. We are generally on the same page. There are one or two small clarifications, which they (RBI) sought, and we have sent our response.
Can we expect pension and insurance reform bills in the Budget session?
I think there is a strong commitment on the part of the government at the highest level. Rest will depend upon Parliament.
There is also a suggestion of allowing 26% FDI and 23% FII investment in insurance sector, possibly to win over Opposition.
I cannot comment on how it will pan out. You must appreciate that the government could get the two key bills of the banking sector passed in last session. It happened because of the commitment of the government and the finance minister in particular. So you please be assured that in the next session, the government will put its sincere and earnest effort to get these two Bills passed.
Do you see globally financial system stable at the moment?
There is an equilibrium at this stage globally, and a lot will depend upon the economic growth. If growth happens, there is no issue. If growth does not happen, there would be a pressure on the banking system across (the globe), and it will also affect us.