Govt okays Banking Laws Amendment Bill

The government today gave green signal to the Banking Laws Amendment Bill that seeks to align the voting rights in banks in proportion with the equity holding.

Currently, the voting rights of a shareholder is limited to 1% in state-owned banks and 10% in private banks irrespective of the equity holding.

The Amendment Bill, which was cleared by the Union Cabinet, will now be tabled in Parliament for approval, sources said.

The amendments, once approved by Parliament, will enhance the voting power of shareholders in line with the portion of equity held by them.

Finance Minister Pranab Mukherjee in his Budget speech has listed banking laws amendment legislation as one of the seven bills that government proposed to take up to pursue financial sector reforms.

"The financial sector reforms initiated during the early 1990s have borne good results for the Indian economy. The UPA government is committed to take this process further," Mukherjee had said in his Budget speech.

Besides the Banking Laws Amendment Bill, the other important financial sector bills that Mukherjee proposed to pursue include Insurance Laws (Amendment) Bill, 2008, Life Insurance Corporation (Amendment) Bill, 2009 and revised Pension Fund Regulatory and Development Authority Bill, 2005.