A bill to empower the government to fix the authorised or the issued capital of a subsidiary of the State Bank of India or to appoint its top officials was introduced in the Lok Sabha on Tuesday.
The SBI (Subsidiary Banks Laws) Amendment Bill 2009, introduced by minister of state for finance P K Bansal, was necessitated as these powers were vested with the Reserve Bank of India from whom the ownership of these banks were transferred to the Centre few years ago.
"Due to change in ownership, those provisions need to be suitably modified to reflect the change in ownership. Further, the change of ownership in the State Bank also necessitate consequential changes" in the SBI (Subsidiary Banks) Act 1959 and the State Bank of Hyderabad 1956, the Statement of Objects and Reasons of the bill said.
Once passed, the bill would empower the Centre to increase or reduce the authorised capital of a subsidiary bank, fixation and raising of issued capital, issuing bonus shares to shareholders and appointment of Managing Director, among other things.
The legislation would amend the State Bank of Hyderabad Act and the SBI (Subsidiary Banks) Act to incorporate these provisions, the statement said.