Thursday, August 8, 2013

[aaykarbhavan] Re: Companies Bill made easy in 10 steps, Banking Bill in 10 easy steps.




Banking Bill simplified in 10 steps

Big question. Will the bill drive foreign investments into Indian banks and will it breathe new life into them?
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Read more on:    Parliament | Chidambaram | Upa | Bjp | Banking Bill
The Congress-led United Progressive Alliance (UUPA&select=keyword">PA) government seems to be in a hurry this winter session. What's the latest talk in the corridors of power is: It is now or never for the Congress party. Political pundits are of the view that the party has thrown its weight behind the Prime Minister's economic reforms.
Emboldened by the passing of multi-brand retail FDI in both the Houses, the government has now secured the Lok Sabha's green signal for the Banking Laws (Amendment) Bill, 2011. The bill aims at attracting more foreign investment into the banking industry. Economists say it is still too early to predict whether big-ticket reforms are back on track or not.

Here's a list of 10 things you must know about :
1) The Reserve Bank of India (RBI) had wanted the government to amend the banking laws before starting the process towards issuance of new banking licences.

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2) The bill also gives voting rights to investors in private sector banks commensurate with their shareholding. At present, there are 20 nationalised banks and 22 private sector banks in the country.

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3) The cap on voting rights for investors in private sector lenders will consequently rise to 26 per cent from 10 per cent. In public sector banks (PSU) banks, the cap on voting rights has been raised to 10 per cent from 1 per cent.

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4) The minimum capital requirement and guidelines for setting up new banks are still to be notified by the central bank. 

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5) The bill provides the RBI more powers and the central bank can supersede bank board and inspect the books of bank associates.

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6) To woo the Opposition, mainly the Bharatiya Janata Party (), the government dropped the clause in the bill that allowed banks to trade in commodity futures.

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7) The Competition Commission of India to decide on mergers and acquisitions. The Federation of Indian Chambers of Commerce and Industry (Ficci) welcomed passage of the bill and said this would lay the foundation for many reforms in the sector.

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8) Finance Minister P contested the charge of job losses. He said: "The plans were afoot to hire 84,500 people in PSU banks this year. Also, 6,000 branches will be opened each year." 

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9) The Finance Minister expressed the commitment of the government to infuse Rs.15,000 crore into public sector banks in the current financial year and retain their basic character.

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10) The bill will allow foreign banks to convert their Indian operations into local subsidiaries or transfer shareholding to a holding company of the bank without paying stamp duty.

Companies Bill made easy in 10 steps

A new law gives more teeth to the shareholder and empowers him to take legal action against a company for fraud
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Here comes the big bang economic reforms: Multi-brand retail FDI, , and many more are in the pipeline. It appears that the United Progressive Alliance () government is making sure that every part of Plan A is firing on all cylinders.
The government gave a facelift to 56-year-old companies act. On 18 December, the Lok Sabha passed the Companies Act 2012. 

More importantly, the bill gives more teeth to shareholders. Now, they can take legal action against fraud. Also, it closes a window for independent directors as they won't get any stock options.
Here's a list of 10 things you must know about Companies Bill:
1) The bill aims at improving corporate governance also contains provisions to strengthen regulations for companies and auditing firms.

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2) Although the bill does not precisely define what constitutes corporate social responsibility (CSR), it will mandatory for profit-making companies to spend on activities related to CSR.

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3) The CSR condition will apply to firms that have a net worth in excess of Rs 500 crore, or a turnover of Rs 1,000 crore or more, or a net profit of Rs 5 crore or more.

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4) The act proposes to tighten the laws for raising money from the public. The move will hit chit funds. Only banking companies, NBFCs and other firms allowed by regulators will be permitted to accept deposits from the public.

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5) A director's remuneration should not exceed five per cent of a company's net profit. The new law also aims to strengthen corporate governance. It will be mandatory for independent directors to constitute at least one-third of the board.

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6) If a company winds up operations, it must pay two years' salary to its employees.

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7) The act provides that: "Shareholders associations or group of shareholders are to be enabled to take legal action in case of any fraudulent action on the part of company and to take part in investor protection activities and class action suits."

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8) The legislation grants statutory powers to the Serious Fraud Investigation Office (SFIO) to tackle corporate fraud. The SFIO will get a big fillip once the legislation comes into force.

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9) The bill also bans buy back of shares within one year of the last buyback of shares. 

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10) Audit firms cannot take up more than 20 assignments at any time. The appointment of auditors for five years to be ratified annually.

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Brief History: The amendments, to the Bill that has been in force since 1956, were first introduced in August 2008. However, it was withdrawn as the Lok Sabha was dissolved. It was again introduced in in 2009 and sent to the Standing Committee, which presented its report in August 2010. Notably, unlike most Bills, the Bill was referred to the Standing Committee twice. The revised Bill 2011 was again referred to the committee as certain new provisions were included. The current amendments to the Bill are in line with the suggestions put forward by a Parliamentary Standing Committee on Finance.








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