Senior bankers and finance professionals have heaved a collective sigh of relief with Manmohan Singh taking over as the prime minister. They feel that with Singh at the helm of affairs, the pace of reforms will not slow down.
Close to a dozen of financial sector-related Bills have been pending before the government -- some of them have lapsed and will require reintroduction while a few others need to be drafted.
There is at least one instance where a Bill was passed but never got notified: the Money Laundering Act.
Bank of Baroda chairman P S Shenoy said, "Giving his track record, I am sure he will carry on with reforms." ICICI Bank's deputy managing director Kalpana Morparia said as an architect of reforms, Singh is competent to provide the country with growth and stability.
Dena Bank chairman Anil Khandelwal too was visibly happy as "Singh not only understands the broader economic issues but also the nuances of banking."
The list of banking sector related Bills pending before the government includes the Banking Regulation (Amendment) Act 2003, Banking Regulations (Miscellaneous provisions) Amendment Act, Banking Companies Acquisition and Transfer of Undertakings Amendment Act and the Financial Companies Regulation Act.
The Banking Regulation (Amendment) Act deals with lifting the 10 per cent cap on voting rights in private sector banks. Two successive budgets (in 2002 and 2003) promised to lift the cap.
The Banking Regulations (Miscellaneous provisions) Amendment Act deals with a series of amendments on consolidated supervision, connected lendings, besides bringing in the urban cooperative banks under the ambit of commercial banks.
This has been referred to the standing committee on finance in the face of stiff resistance to the changes proposed in cooperative banking.
The Banking Companies Acquisition and Transfer of Undertakings Amendment Act has proposed bringing down the government stake in public sector banks to 33 per cent from the present 51 per cent. This has been hanging in balance over the last few years.
The new government is unlikely to push for it as Prime Minister-designate Singh has ruled out privatisation of PSU banks.
The Financial Companies Regulation Act proposed to deal with non-banking finance companies exclusively. So far, the NBFC are regulated by chapters III(B) and III(C) of the RBI Act. All these Bills have been lapsed and need to be reintroduced again.
The list of Bills that are waiting in the wings are the Payment & Settlement Bill, Factoring of Debts due to Industrial and Commercial Undertakings Bill, Credit Information Bureau (India) Ltd Bill and Securities Contract & Regulation Act (SCRA).
The SCRA deals with demutulisation and corporatisation of the stock exchanges.
The government had also been working with Banking Deposit Insurance Corporation (BDIC) Act which will recast the existing Deposit Insurance Credit Guarantee Corporation.
Besides, there was a move to amend the RBI Act to path the path for Reserve Bank's divestment of stake in State Bank of India, National Housing Bank and Nabard and State Bank of India Act to lift the cap on foreign institutional investors in the State Bank. The was a proposal to amend the SBI Associate Bank also to bring down the par value of the associate bank shares to Rs 10 from Rs 100.
There are also a few bills pending related to the corporate sector. They include the Chartered Accountants Amendment Bill, Cost and Work Accountants Bill and Company Secretaries Bill besides the one on corporate governance.
