Mr. Hargovind Sachdev, ex General Manager, State Bank of India
- The Banking Laws (Amendment) Bill 2011, passed by both houses of parliament in December 2012 has become law. The important amendments/provisions included inter alia
- To enable banking companies to issue preference shares subject to regulatory guidelines of the RBI Increase in exercising of voting rights in respect of preference shares from one per cent to ten per cent for nationalized banks
- Increase in the cap on voting rights from 10 per cent to 26 per cent in private sector banks.
- Creation of Depositor Education and Awareness Fund by utilizing the funds parked in inoperative deposit accounts
- Acquisition of 5% or more of shares or voting rights in a banking company by any person, subject to approval of the RBI and empowering the RBI to impose such conditions as it deems fit in this regard
- To empower the RBI to collect information and inspect associate enterprises of banking companies
- To empower the RBI to supersede the Board of Directors of banking company for a period not exceeding six months (can be extended up to a maximum of 12 months) and appointment of administrator till alternate arrangements are made
- Removal of the floor limit of minimum cash reserve ratio of ‘at least three per cent’ and empowering the RBI to grant banks such exemption in CRR provisions if it thinks fit, so note with passing of this Bill there is no floor limit of CRR.
- To enable the nationalized banks to raise capital through “bonus” and “rights” issue for expansion of their business
- Increase in the authorized capital of nationalized banks from Rs. 1500 crore to Rs. 3000 crores and to increase or decrease it with the approval from the Government and the RBI without being limited by the ceiling of a maximum of Rs. 3000 crores under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980
- Increase in the quantum of penalties/fine being imposed for contravention of regulatory Guidelines/noncompliance/ delayed compliance
- Exemption of mergers and acquisitions in the banking sector from the scrutiny of the Competition Commission of India (CCI) etc.
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