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Govt likely to introduce 2 key financial sector bills in winter session

The government can submit two major financial sector bills, including the proposed law to facilitate the privatization of public sector banks, as announced by the finance minister in the budget.

It is also likely that the government will introduce table amendments to the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013, to enable the separation of the National Pension System Fund (NPS) from the PFRDA to ensure universal pension coverage.

The sources said that the government is likely to introduce amendments to the Banking Regulation Law of 1949 during the next winter session of Parliament.

The sources added that besides this, amendments to the Banking Companies (Acquisition and Transfer of Companies) Law of 1970 and the Banking Companies (Acquisition and Transfer of Companies) Law of 1980 will be needed for the privatization of banks.

They said that these acts led to the nationalization of banks in two stages, and the provisions of these laws must be changed to privatize banks.

Finance Minister Nirmala Sitharaman, Financial Sector Bills, Winter Session, Parliament,financial sector bills

The month-long winter parliament session is expected to start late next month. The second batch of supplemental support applications, which allow the government to allocate additional expenditures beyond the Finance Bill, would also be introduced for approval.

Finance Minister Nirmala Sitharaman, who presented the budget 2021-22, announced the privatization of Public Sector Banks (PSBs) as part of disinvestment drive to garner Rs 1.75 lakh crore.

"Apart from IDBI Bank, we are proposing to start privatizing two public sector banks and one public insurance company in 2021-22," he said.

To ensure the privatization of a public insurance company, the government has already received Parliament's approval of the Public Insurance Business (Nationalization) Amendment Bill 2021, in the monsoon session that ended in August 2021.

With the amendment in the PFRDA Act, sources said, the powers, functions and duties of the NPS Trust, which is currently established in the PFRDA (National Retirement System Fund) Regulation 2015, may be subject to a charitable trust or corporate law.

The intent is to keep the NPS Trust separate from the pension regulator and to be administered by a competent 15-member board. Outside of this, the majority of the members are likely to be from the government, since they, including the states, are the group's largest shareholders.

The trust was established by PFRDA to take care of assets and funds under the NPS. The proposal to separate the two jobs has been under consideration for the past few years.

The Authority was established to promote and ensure the orderly growth of the pension sector with adequate powers over pension funds, the Central Record Keeping Agency and other intermediaries. It also protects the interests of the members.

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