A bill which seeks to deal with insolvency of financial service providers was today referred to a Joint Committee of Parliament.
The bill provides for establishment of a resolution corporation with powers relating to transfer of assets to a healthy financial firm, merger or amalgation, liquidation to be initiated by an order of the National Company Law Tribunal.
It can also designate certain financial providers as systematically important financial institutions, the failure of which mahy disrupt the entire financial system, said the 'Statement of Objects and Reasons' of the bill.
It also provides for creation of corporation insurance fund, corporation resolution fund and corporation general fund.
"The proposed legislation together with the Insolvency and Bankruptcy Code, 2016 is expected to provide a comprehensive resolution mechanism for the economy with the objective of protecting consumers of specified service providers and public funds thereby contributing to the stability and resilence of the financial system," the Statement said.
Several opposition members, including Bhartruhari Mahtab (BJD), Adhir Ranjan Chowdhury (Cong) and Saugata Roy (TMC), objected to the decision to refer the bill to the joint committee, saying the move amounted to weaking the department related standing committees.
Mahtab wanted to know the "hidden agenda" behind referring the bill to the panel and not the Standing Committee.
Minister of State for Parliamentary Affairs S S Ahluwalia said that members should be happy that a Joint Committee is being set up to scrutinise the bill as its suggestion would be accepted by the government.
"You will more leverage as member of the Joint Committee in suggesting changes to the bill," the minister said, adding there was no hidden agenda behind setting up the panel.
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