Govt tables Banking Laws (Amendment) Bill 2011 in Lok Sabha

The Bill proposes to raise the ceiling on voting rights of shareholders of nationalised banks from 1% to 10% and proposes to remove the voting right restriction of 10% for private sector banks in the total voting rights of all the shareholders of the banking company

New Delhi: The government today tabled a Bill in the Lok Sabha to raise the voting rights of shareholders of nationalised banks to 10% from the existing 1%, a move that will make investment in state-owned banks more attractive, reports PTI.

The Banking Laws (Amendment) Bill 2011 proposes to raise the ceiling on voting rights of shareholders of nationalised banks from 1% to 10%, the statement of Object and Reason of the Bill said.

In addition, the Bill proposes to remove the voting right restriction of 10% for private sector banks in the total voting rights of all the shareholders of the banking company. In the case of private sector banks, the voting rights would be commensurate with investors' shareholding.

There are 20 nationalised banks in the country and 22 private sector banks in the country.

The Bill was tabled in the Lower House by finance minister Pranab Mukherjee, seeking to amend the Banking Regulation Act, 1949, the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, and to make consequential amendments in certain other enactments.

These amendments would enhance the regulatory powers of the Reserve Bank of India (RBI) and increase the access of the nationalised banks to the capital market to raise funds required for expansion of the banking business, it said.

Besides, it enables nationalised banks to increase or decrease their authorised capital with approval from the central government and RBI without being limited by the ceiling of a maximum of Rs3,000 crore, it said.

It also proposes to give powers to the nationalised banks to issue two additional instruments-bonus shares and rights issues-for accessing the capital market to raise capital required for expansion of banking business.

At the same time, it proposes to confer powers upon the RBI to impose such conditions as it deems necessary while granting such approval for acquisition of 5% or more share capital of a banking company if it considers necessary.

The amendment also proposes to confer power on the central bank to call for information and returns from associate enterprises of banking companies and also to inspect the same.

The Bill noted that taking advantage of the liberalised environment, banking companies are engaging in multifarious activities through the medium of associate enterprises.

It has, therefore, become necessary for the Reserve Bank of India as the regulator of the banking companies to be aware of the financial impact of the business of such enterprises on the financial position of the banking companies, it added.

The amendment moved by the government also exempts mergers and acquisitions in the banking sector from the scrutiny of the Competition Commission of India.

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Shilpi Cable Technologies IPO opens on 22nd March

Shilpi Cable Technologies new issue closes on 25th March

Incorporated in 2006, Shilpi Cable Technologies has launched its IPO on 22nd March.

Shilpi Cable is engaged in the business of manufacturing radio frequency (RF) cables, widely used in telecom, automobile and power sectors. The company's factory is located in Chopanki, Bhiwadi, Dist Alwar, Rajasthan.

The new issue closes on 25th March. CARE has assigned an IPO Grade 1 to Shilpi Cable IPO. This means as per CARE, company has 'Poor Fundamentals'.

CARE assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.

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Reliance Mutual Fund unveils 181 days fixed horizon fund

Reliance Mutual Fund new issue closes on 23rd March

Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XVIII-Series 7, a close-ended income scheme.

The investment objective of the scheme is to generate regular returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/debt securities normally maturing in line with the time profile of the scheme with the objective of limiting interest rate volatility. The tenor of the plan is 181 days.

The new issue closes on 23rd March. The minimum investment amount is Rs5,000.

Crisil Short Term Bond Fund Index is the benchmark index. Amit Tripathi is the fund manager.

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