LS clears bank Bill sans commodity trade clause
Experts hailed the Lok Sabha nod for the legislation, but said that dropping the provision to allow banks to trade in commodity futures was regressive. Care Ratings chief economist Madan Sabnavis said: “Banks have significant direct and indirect exposure to commodities, and a permission to participate in futures would have enabled them to hedge this exposure. This is pertinent in the backdrop of rising bad loans, especially commodity-related exposures such as agriculture loans or credit to steel companies.”
Meanwhile, shares in Financial Technologies (India) and Multi Commodity Exchange of India (MCX) dropped 1.2% and 0.8% respectively at the BSE following the government’s announcement to drop the clause.
The insurance Bill, inter alia, seeks to hike FDI limit in the sector to 49% while the pension Bill envisages to allow FDI at par with the insurance sector in pensions, besides giving statutory powers to the sectoral regulator.
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