Amendment to banking law passed

An amendment bill to strengthen the Reserve Bank of India (RBI) was passed by the Lok Sabha on Tuesday after government, bowing to pressure from the Opposition, withdrew contentious clauses from the legislation, including one that sought to allow public sector banks enter commodity futures trading.

“The objectives of this bill are fairly simple. Most of the provisions of the bill are intended to strengthen the regulator, the RBI. The bill is too important for me. This bill should pass because the RBI is waiting for it to acquire additional powers. I agree not to press the (contentious) clauses,” Finance Minister P Chidambaram said, concluding the discussion on the Banking Laws (Amendment) Bill.

The provision to allow banks to enter commodity futures trading was based on the recommendations of the standing committee on food and consumer affairs and report of the Reserve Bank's working group, the Finance Minister said.

“As we acknowledge the sage advice of one standing committee, we also acknowledge the advice of another standing committee. After the principal Opposition party and some others said, please do not press that clause, I said, all right, I will not press that clause,” he added.

The legislation, which saw intense debate in the Lok Sabha, was passed by voice vote. The amendments proposed by the Left parties were rejected.

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