The Banking Laws (Amendment) Bill, 2012, has been cleared by both houses of Parliament. The bill will become law once President Pranab Mukherjee signs it.
Some Features of the Bill are as Follows–
- The new regulation increases the shareholders’ voting rights from 10 per cent to 26 per cent in private sector banks, making investment attractive to foreign players. This will make the Indian banking sector attractive for the overseas investors and is expected to lead to consolidation in the industry.
- It allows nationalized banks to issue bonus shares and rights to give them flexibility to raise capital.
- Now, Reserve Bank of India (RBI) could issue new bank licenses to business houses.
- It gives the RBI powers to inspect the books of any associate enterprise of a bank
- RBI will have powers to impose penalty if banks fail to maintain adequate CRR
- Bill also enables the government to raise voting rights in state banks such as the State Bank of India to 10 per cent from the current one per cent.
- Bill allows foreign banks to convert their Indian operations into local subsidiaries or transfer shareholding to a holding company of the bank without paying stamp duty