The central government has decided to lay discussions on three important legislative matters related to the Finance Ministry in the upcoming Monsoon Session. The issues comprise of the amendment to the Banking Regulation Act as specified in the ordinance to deal with non-performing assets, a bankruptcy Bill for financial firms, and passage of a new Nabard Bill.
Reportedly, the Finance Ministry’s kitty is relatively lighter this time compared to the Budget session when the Goods and Services Tax Bills (GST) had to be passed apart from the Finance Bill. The Monsoon Session is scheduled to begin on July 12.
As per the decided lines, the government has to amend the Banking Regulation Act after an ordinance was notified in May to give the Reserve Bank of India (RBI) the authority to direct banks to initiate bankruptcy proceedings for defaulting companies, and to take decisions on behalf of lenders while dealing with issues pertaining to stressed assets.
Two sections were inserted after Section 35A of the Act through the ordinance, which will now require parliamentary approval. The ordinance lapses in early November.
Another item lined up for the Monsoon session is the Financial Resolution and Deposit Insurance Bill, 2017. It is a proposed law to deal with matters concerning the insolvency of banks, insurance companies, and other financial services firms, which follows the Bankruptcy Code, 2016, that deals with bankruptcies of all other companies. The Cabinet, led by Prime Minister Narendra Modi, had approved the proposal to introduce the Bill in Parliament last month.
Next in the queue is the National Bank for Agriculture and Rural Development (Amendment) Bill, 2017 (Nabard Bill) that was introduced by Finance Minister Arun Jaitley in Lok Sabha in the Budget session. The Bill seeks to amend the National Bank for Agriculture and Rural Development Act, 1981.
The new Bill proposes an increase in NABARD’s capital from Rs 5,000 crore to Rs 30,000 crore. This will be done by the government post consultations with the RBI. It also proposes to transfer the central bank’s stake in NABARD to the government.