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Millennium Post

Bank Bill puts sector in disarray

The banking Amendment Bill passed in the Lok Sabha on Tuesdayis about the regulation of the banking sector in a new way. The Bill has no basis in empirical reality. It has merely empowered the Reserve Bank of India in a way that has not been contemplated before. It has empowered the setting up of new banks. The Bill merely contemplates the circulation of money in a new way.

This need not necessarily mean good. Some of the old features of the banking sector were put in place to stop the business of money laundering and the loot of public money. Now the amendment has affected the future of the money that has been invested by many people in public sector banks and in banks linked to them may be in jeopardy. This is because the transfer of funds form public sector banks to the new banks in the private sector may adversely impact public investments.

A lot of the funds invested in the public sector banks is public money. The transfer of funds necessarily means that a lot of the funds that are available to the people may go the new banks whose antecedents are unknown.  The Congress Party’s rush to pass this Bill, despite the combined opposition of all the major Opposition parties, might raise questions on its action. The Bahujan Samaj Party led by Mayawati has opposed the Banking Amendment Bill as also the Bharatiya Janata Party. The passage of the Bill remains a mystery.

The Bill has not even been discussed in Parliament. This is the cause of discord between the Opposition parties and the allies of this government most of whom have deserted it as well as the very few friends it has left. As the Bill has been passed in the Lok Sabha by a minority government which has been deserted by most of its allies it adds flavour to the mystery of the passage of this Bill.
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