The Centre may push some pending legislative reforms, including liberalisation of the insurance sector, creation of a national financial information registry and streamlining of provisions of the Companies Act, in the upcoming Budget session, officials have said.
Streamlining of the insolvency framework may, however, be pushed to the winter session of Parliament, they said. The Budge session is scheduled to commence on July 22 and conclude on August 12.
During the session, the government may take up the National Financial Information Registry (NFIR) Bill, which seeks to provide a 360-degree information system to lending institutions to expedite the process and reduce the cost of credit.
For individuals or enterprises wanting a lower interest rate, banks will ask for their consent to access data about their business volume, electricity consumed, GST paid, etc, from NFIR. If consent for data is not given, banks will likely ask for collateral and loans may be costlier.
Similarly, big-ticket reforms in the insurance sector will likely be pushed including the introduction of a composite insurance licence, differential minimum capital and captive insurance.
The Insurance Act, 1938, and the regulations of the Insurance Regulatory Development Authority of India (IRDAI) do not allow composite licensing for an insurer to undertake life, general, or health insurance under one entity. Allowing composite licensing could provide further impetus to the insurance sector owing to its various benefits such as reduction of costs and compliance hassles for insurers. It can also offer customers more choice and value, such as a single policy that covers life, health, and savings.
To promote microinsurance that plays an important role in financial inclusion and poverty alleviation, the minimum capital requirement will likely be lowered than the mandated Rs 100 crore. The Bill to amend the Insurance Act and the IRDAI Act is almost ready, officials have said.
Certain proposals to amend the Companies Act 2013 will be taken up in the first few days of the session, including allowing the companies to hold AGMs/EGMs through electronic mode and to ease the requirement of raising capital for distressed companies.
For the past three years, companies have been holding their AGMs virtually. The ministry of corporate affairs has allowed this by way of circulars which have been extended on yearly basis. This is not part of the regulations right now and require amendments in the Act.