The Lok Sabha has passed the Banking Regulation (amendment) Bill, a move cited by the Reserve Bank of India as a prerequisite for granting new bank licences.
The passage of the bill was facilitated by the removal of a controversial Forward Market’s Contract clause which would have allowed banks to enter into future trading of commodities.
However, very few banks were keen on trading in commodities and some felt that the clause had been incorporated to provide banks a level playing field with corporates.
The amendments arm RBI to inspect books of conglomerates, make board and top management appointments in banks and control transfer of large chunks of shares.
The bill allows investors to have voting rights with a cap in case of private sector banks going up to 26% from 10%.
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