Lokpal Bill passed; statute amendment bill defeated in LS

The Lokpal Bill about which parties across the spectrum, the opposition—right and the left—and allies and supporters of the government, had some objection or other was passed by a voice vote

New Delhi: After failed moves over the past 43 years, the Lok Sabha last night passed a historic bill to create a nine-member anti-corruption watchdog Lokpal after a marathon debate but the government suffered a major embarrassment when the legislation to give it a Constitutional status was defeated for want of requisite two-third majority, reports PTI.

Official amendments were carried out to the Lokpal and Lokayukta Bill, 2011, giving the option to states to set up Lokayuktas and leaving armed forces and Coast Guard out of its purview.

The Constitution Amendment Bill, an idea of Rahul Gandhi to give constitutional status to Lokpal and Lokayukta, was also favoured by the Standing Committee which considered the Bill.

The treasury benches, including prime minister Manmohan Singh, leader of the house Pranab Mukherjee and UPA chairperson Sonia Gandhi, looked glum when the leader of opposition Sushma Swaraj raised the issue that the voting on the clauses of bill did not have the required special majority.

A Constitution Amendment Bill to be passed should have more than 50% of the members of the House present and of them, two-third support is mandatory.

The House witnessed high drama as voting on the three clauses showed that the ruling side had failed to get the required number of 273 in favour, prompting Speaker Meira Kumar to drop the clauses from the Bill.

“Since the clauses have not been incorporated, the motion for adoption of the bill becomes infructuous,” the Speaker said.

An angry Mr Mukherjee termed the development as “a sad day for democracy”, blamed the opposition especially BJP for the fiasco and warned them that “people will teach you a lesson”.

On the Clause two, 247 voted in favour and 178 against, while in Clause three 251 were in favour and 179 against.

Clause one received 250 and 180 against.

The Lokpal Bill about which parties across the spectrum, the opposition—right and the left—and allies and supporters of the government, had some objection or other was passed by a voice vote.

The House also passed the Protection to Persons Making Disclosures Bill, 2011 aimed at protecting whistle-blowers.

The defeat of the Constitution (Amendment) Bill came mainly because the parties supporting the UPA from outside Samajwadi Party (22), BSP (16) and RJD (4) staged a walkout, bringing the numbers down for the government.

During the animated over 10-hour debate, prime minister Manmohan Singh asked parties to “rise above partisan politics” to demonstrate to the people of the country that “this House means business” in its effort to combat corruption.

He said a ‘holistic’ approach was needed to deal with the ‘cancer’ of corruption but rejected demands for bringing CBI under the purview of Lokpal as he warned that no entity should be created inconsistent with the constitutional framework.

Capping the debate during which several parties, including BJP, BJD, JDU, RJD, SP, TDP and Left said the Bill was weak and wanted it withdrawn, Mr Mukherjee rejected the contention that the legislation had been brought in ‘haste’ or under pressure.

Allaying fears of several parties, including UPA constituents Trinamool and DMK, that the provision for setting up Lokayuktas was an ‘attack’ on federal structure, he said the government had made amendments stating that notification would not be issue without the consent of state governments.

The amendment, along with some others, was decided during an emergency meeting the prime minister held with party chief Sonia Gandhi and other senior leaders ahead of the voting in view of opposition by allies.

This is the ninth Lokpal Bill introduced in government in a series that started as early as 1968 and ended in 2001.

Seven of them lapsed with the dissolution of the Lok Sabha while one was withdrawn.

“There are some very special moments in the life of a nation. This is one such moment. The nation waits with bated breath how the collective wisdom of this House will be reflected in the vote at the end of the debate on the Lokpal and Lokayuktas Bill, 2011,” Mr Singh said.

Noting that the broad provisions of this Bill have been vigorously debated both in the public domain and by political parties, he underlined that the task of legislation was “very serious business and must eventually be performed by all of us who have been constitutionally assigned this duty.” 

In an apparent message to Anna Hazare who has been pressing his demands with regard to Lokpal, Mr Singh said, “others can persuade and have their voices heard. But the decision must rest with us.” 

He warned that “no entity should be created inconsistent with our constitutional framework and charged with onerous executive responsibilities without any accountability... Let us not create something that will destroy all that we cherish—all in the name of combating corruption. Let us remember that the road to hell is paved with good intentions.” 

He said, “Today we are given to believe that a government that is directly elected by the people and accountable to it cannot be trusted but a body that will not derive its legitimacy from the people directly or be accountable to it could be trusted to wield its immense powers with honour and trust.”

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Risk mitigation norms for capital market exposure of banks extended

“Only those custodian banks, which have a clause in the agreement with their clients which gives them an inalienable right over the securities to be received as pay out in any settlement, would be permitted to issue Irrevocable Payment Commitments (IPCs),” the RBI said

Mumbai: To protect banks from possible default by mutual funds and foreign institutional investors (FIIs) in stock markets, the Reserve Bank of India (RBI) on Tuesday extended indefinitely the risk management provision under which banks could provide financial guarantee to such clients only after getting full rights on the pay out securities, reports PTI.

“Only those custodian banks, which have a clause in the agreement with their clients which gives them an inalienable right over the securities to be received as pay out in any settlement, would be permitted to issue Irrevocable Payment Commitments (IPCs),” the central bank said.

The provision was to expire on 31st December but the RBI has decided that “the arrangements will continue to be in force until further review.” 

Stock market has been witnessing volatility in the last few months due to both global and domestic factors leading to erosion in market capitalisation.

Banks usually issue IPCs to stock exchanges on behalf of its MF and FII clients while executing the pay-in and pay-out on the second day after trade day (T+2) of a security on stock exchanges.

RBI further said the IPC will be treated as a financial guarantee with a Credit Conversion Factor (CCF) of 100.

“However, capital will have to be maintained only on exposure which is reckoned as CME (Capital Market Exposure) and the risk weight would be 125% thereon,” it added.

Last year, the risk mitigation mechanism was put in place to protect banks from the adverse movements in the equity prices and the possibility of default by mutual funds and FIIs, while ensuring that there is no undue disruption in the capital market.

IPCs is a commitment in the form of securities from Mutual Funds and FIIs as pay out at the time of settlement.

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RBI asks banks to issue CTS 2010 standard cheques from 1st April

The new cheque standard ‘CTS 2010’ with set of minimum security features would ensure uniformity across all cheque forms issued by banks in the country and also help presenting banks while scrutinising and recognising cheques of drawee banks in an image-based processing scenario, RBI said in a notification

Mumbai: The Reserve Bank of India (RBI) on Tuesday  directed all banks to issue cheques conforming to Cheque Truncation System (CTS) 2010 standard with uniform features from 1 April 2012 onwards, reports PTI.

The new cheque standard ‘CTS 2010’ with set of minimum security features would ensure uniformity across all cheque forms issued by banks in the country and also help presenting banks while scrutinising and recognising cheques of drawee banks in an image-based processing scenario, RBI said in a notification.

The homogeneity in security features is expected to act as a deterrent against cheque frauds, while the standardisation of field placements on cheque forms would enable straight-through-processing both under CTS and MICR clearing, it said.

It has been decided to prescribe a cut-off date for implement the—CTS-2010 standards—across the country, it said.

All banks providing cheque facility to their customers, are, therefore, advised to issue only ‘CTS-2010’ standard cheques not later than 1 April 2012 on priority basis in northern and southern region which will be part of the northern and southern CTS grids respectively and across the country by 30 September 2012 through a time bound action plan, it said.

The introduction of new cheque standards ‘CTS 2010’ was warranted on account of several developments in the cheque clearing namely growing use of multi-city and payable-at-par cheques at any branch of a bank, increasing popularity of Speed Clearing for local processing of outstation cheques and implementation of grid based CTS for image-based cheque processing etc, it said.

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