Govt okays law to open banking

The Banking Bill,the Pension Funds Regulatory and Development Authority Bill and the Insurance (Amendment ) Bill form the troika of financial sector reforms that have been pending for long.

Boosted by higher voting rights,investors are expected to pump funds into the country’s private banks,over which they would effectively get greater control. The government has agreed to key recommendations of the Standing Committee on Finance,which included capping voting rights at 26 per cent for private sector banks. The finance ministry had originally proposed raising voting rights commensurate to investors’ shareholding.

The revised Bill will be introduced in Parliament’s current session. The prospects of it being cleared are bright,since the government has acceded to most recommendations of the standing committee chaired by the BJP’s Yashwant Sinha. Finance Minister Pranab Mukherjee has had several meetings with the opposition on crucial financial sector legislation.

On Wednesday,after S&P announced the cut in India’s rating outlook,Mukherjee had said the government would try to get key reform laws passed with broad consensus. “I do hope some of the legislations may be enacted during the latter part of the current session and surely in the monsoon session,” he had said.