Govt working on banking law amendments: Experts discuss key norms that require revision

Among the most welcomed provisions of the Indian budget was the privatisation of public sector undertaking (PSU) banks. News trickling in that the government is proceeding with amending the required laws before the privatisation gets underway. The government is showing a lot of hurry in bringing the amendments.

In an interview to CNBC-TV18, NS Vishwanathan, former Deputy Governor of Reserve Bank of India (RBI), and MR Umarji, former chief legal advisor of Indian Banks' Association, discussed at length about the key norms that require revision, what could be the implications and whether there are any other hurdles to privatisation.

“The public sector banks are constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act 1970, first lot of nationalisation and 1980 was the second lot. These two laws and then there is a State Bank of India Act, under which SBI and its subsidiaries are constituted. All these laws provide that the shareholding of the central government shall be minimum of 51 percent and these laws govern the entire working of the banking business by these public sector banks. So these laws will have to be amended,” said Umarji.