Although the monsoon session of Parliament could be dominated by issues of cow vigilantism, farmers’ protests, unrest in Kashmir and India’s stand-off with China, it could nonetheless be a productive one for business and financial matters.
Among the economic and financial-sector Bills to be tabled are the Banking Regulation (Amendment) Bill 2017 that would replace an Ordinance promulgated in early May, authorising the Reserve Bank of India (RBI) to issue directions to banks to initiate insolvency resolution process in case of loan default. A Bill repealing the State Bank of India (Subsidiary Banks) Act, 1959, will also be tabled; the Bill was necessitated because of merger of five associates banks of SBI and Bharatiya Mahila Bank.
The Financial Resolution and Deposit Insurance Bill, 2017, which would provide for the creation of a Resolution Corporation to deal with bankruptcy in banks, insurance companies and other financial entities, is up on the government’s priority list. The Bill is also aimed at inculcating discipline among financial service providers in the event of financial crises by “limiting the use of public money to bail out distressed entities”.
Once cleared by Parliament, the Bill for financial firms will complement the existing insolvency and bankruptcy code, which is meant for dealing with non-financial entities. The Financial Resolution and Deposit Insurance Bill was cleared by the Union Cabinet on June 14.
Also on the agenda is the National Bank for Agriculture and Rural Development (Amendment) Bill, 2017, that was introduced by finance minister Arun Jaitley in the Lok Sabha in the budget session. The Bill seeks to amend the Nabard 1981 with a view to empowering the Centre to increase Nabard’s authorised capital to Rs 30,000 crore from Rs 5,000 crore.
These apart, the monsoon session may also see amendments to the Negotiable Instruments Act (NIA); this would ensure payees of dishonoured cheques are able to realise the payments even as digital transactions gain momentum.
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Besides, the government intends to introduce the Banning of Unregulated Deposit Schemes and Protection of Depositors Interests Bill that seeks to provide a comprehensive code to ban unregulated deposit schemes and protect interests of depositors. The Bill stipulates that any deposit taker who promotes and accepts deposits in an unregulated deposit scheme may be punishable with imprisonment for a minimum term of two years, which may be extended to 10 years, and with a fine which may extend to twice the amount of aggregate funds collected from subscribers, members or participants in such schemes or arrangements. The Cabinet is likely to approve the Bill shortly.
As per the current schedule, the monsoon session will close on August 11. The presidential election is scheduled for July 17 while the vice-presidential poll will be held on August 5.
On the table
Banking Regulation (Amendment) Bill, 2017
Repeal of SBI (Subsidiary Banks) Act, 1959
Financial Resolution and Deposit Insurance Bill, 2017
Nabard (Amendment) Bill, 2017
Changes to Negotiable Instruments Act