Pending business on financial sector reforms govt’s priority in House

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SummaryWith Opposition parties stalling the passage of the Banking Laws (Amendment) Bill, the possibility of any further moves at financial sector reforms in the current session of Parliament seems uncertain

With Opposition parties stalling the passage of the Banking Laws (Amendment) Bill, the possibility of any further moves at financial sector reforms in the current session of Parliament seems uncertain.

“We need to focus on the banking Bill,” a senior finance ministry official said.

There is no clarity on the introduction of the related Pension Regulatory Development and Authority Bill either. The winter session of Parliament ends next week.

The two Bills that seek to enhance the foreign investment limit in insurance sector to 49 per cent and allow FDI in pension sector were listed for consideration and passing by the House in the current session of Parliament that began on November 22.

They were approved by the Cabinet in October after taking into consideration the reports of the Parliamentary Standing Committee on Finance. Finance minister P Chidambaram had expressed hope that the Bills would be passed in the current session and had indicated that the government would reach out to the Opposition to build a consensus.

Finance ministry officials also stressed that the government would seek to hike FDI in insurance sector to 49 per cent from the current 26 per cent. Any dilution of this clause by allowing FII participation would be done only if necessary, they had said.

Though the government is keen to take forward these long-pending legislations, finance ministry officials said that pending legislative business must be finished in the winter session before further Bills can be taken up.

“We need to get the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill passed by the Rajya Sabha as well,” the first official pointed out.

The Bill that makes changes in the debt recovery system and helps banks recover debts faster was passed by the Lok Sabha on Monday.

The finance ministry is also keen to push through amendments to the Banking Laws in the current session as it would facilitate the grant of new banking permits by the central bank. Reserve Bank of India governor D Subbarao had recently said that it would not be possible to grant new licences without amending the Act.

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