Banking Laws Amendment Bill

Topics: Subsidiary, Corporation, The Bill Pages: 2 (460 words) Published: January 14, 2013
Banking laws amendment bill 2011
The salient features of the Bill are as follows:

• To enable banking companies to issue preference shares subject to regulatory guidelines by the RBI;

• To increase the cap on restrictions on voting rights;

• To create a Depositor Education and Awareness Fund by utilizing the inoperative deposit accounts;

• To provide prior approval of RBI for acquisition of 5% or more of shares or voting rights in a banking company by any person and empowering RBI to impose such conditions as it deems fit in this regard;

• To empower RBI to collect information and inspect associate enterprises of banking companies;

• To empower RBI to supersede the Board of Directors of banking company and appointment of administrator till alternate arrangements are made;

• To provide for primary cooperative societies to carry on the business of banking only after obtaining a license from RBI;

• To provide for special audit of cooperative banks at instance of RBI by extending applicability of Section 30 to them; and

• To enable the nationalized banks to raise capital through “bonus” and “rights” issue and also enable them to increase or decrease the authorized capital with approval from the Government and RBI without being limited by the ceiling of a maximum of Rs. 3000 crore under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980.

Certain additional official amendments have been proposed on the basis of recommendations of the Standing Committee of Finance which gave its report on the Bill on the 13th December, 2011 and has recommended enactment of the Bill, subject to the following modifications:

i) Voting rights in banks may be restricted up to 26%.

ii) The Depositors’ Education and Awareness Fund may be used for the purpose of promoting depositors’ interests.

Further, pursuant to the discussion with Indian Banks’ Association (IBA), RBI and Industry Associations, the following additional...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Banking Amendment Bill-2012 Essay
  • Credit Control in Banking Law Essay
  • law relating to banking Research Paper
  • banking law Essay
  • Banking Law in India Essay
  • How a Bill Becomes a Law Essay
  • Bill Of Rights And Amendments Essay
  • Essay about Bill of Rights and Amendments

Become a StudyMode Member

Sign Up - It's Free