New Delhi, Nov 19: The controversial bill to allow reduction of government equity in public sector banks (PSBs) may be referred to a select committee after introduction in the winter session of Parliament. "We agree that the bill will have to be comprehensively debated and the viewpoints of all the members will have to be considered before passing it," government sources said.In all probability, they said, the bill to amend the Banking Companies (Acquisition and Transfer of Undertakings) Act will be referred to a select committee for "threadbare" and wider discussions and for changes if necessary, after its introduction in Parliament. The Centre's decision last week to allow reduction of government equity in 26 PSBs, up to 33 per cent, evoked sharp criticism from bank unions which said it could lead to "hostile takeovers" by some industrial houses. The government has, however, asserted that the public sector character of the banks will not be changed and government control would remain intact.
The proposed amendments also seek to provide for increase in the number of whole-time directors and for setting up of a financial restructuring authority for weak and potentially weak banks. It also aims at enhancing the flexibility and autonomy of the boards of the PSBs. According to the bill, besides raising the number of whole-time directors from two to four, a Central government official could now be nominated as director in two banks.
Presently, only one official can be nominated as a director in only one bank. Among other things, the new amendment seeks to delete the present mandatory requirement of having nominees from the RBI, different financial institutions and chartered accountants on the boards of the nationalisedbanks.
(PTI)
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