No criminality in business default: PSB consolidation from April

Bill would provide ‘ease of living’ for law-abiding corporates, de-clog criminal justice system

GN Bureau | March 4, 2020


#Union cabinet   #finance ministry   #Companies Act   #banking   #Public Sector Banks   #Nirmala Sitharaman  


Genuine and bona fide default in business will no longer lead to the tag of criminality and punishment, as the government has decided to amend the company law. The union cabinet, chaired by prime minister Narendra Modi, on Wednesday approved the Companies (Second Amendment) Bill, 2019 to amend the Companies Act, 2013. The cabinet approved the mega consolidation of ten public sector banks (PSBs) from April 1.

The bill would remove criminality under the Act in case of defaults, finance minister Nirmala Sitharaman explained. Criminality can be determined objectively. This will bring relief in cases of defaults where the element of fraud is lacking or which do not involve larger public interest. This would also lead to further de-clogging of the criminal justice system in the country. The Bill would also further ‘ease of living’ for law-abiding corporates.

Earlier, the Companies (Amendment) Act, 2015 amended certain provisions of the Act to remove difficulties faced in implementation of various provisions of the Act.

Meanwhile, in another decision, the cabinet approved the consolidation of public sector banking on the following lines:

(a)  Amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank
(b)  Amalgamation of Syndicate Bank into Canara Bank
(c)  Amalgamation of Andhra Bank and Corporation Bank into Union Bank of India
(d)  Amalgamation of Allahabad Bank into Indian Bank

The amalgamation will result in the creation of seven large PSBs with scale and national reach with each amalgamated entity having a business of over Rs 8 lakh crore. It would help create banks with scale comparable to global banks and capable of competing effectively in India and globally. Greater scale and synergy through consolidation would lead to cost benefits which should enable the PSBs enhance their competitiveness and positively impact the Indian banking system, said an official note.

In addition, consolidation would also provide impetus to amalgamated entities by increasing their ability to support larger ticket-size lending and have competitive operations by virtue of greater financial capacity. The adoption of best practices across amalgamating entities would enable the banks improve their cost efficiency and risk management, and also boost the goal of financial inclusion through wider reach.

Further, with the adoption of technologies across the amalgamating banks, access to a wider talent pool, and a larger database, PSBs would be in a position to gain competitive advantage by leveraging analytics in a rapidly digitalising banking landscape.

Comments

 

Other News

Govt announces strategic collaboration to empower Atal Tinkering Lab schools

Atal Innovation Mission, NITI Aayog and All India Council for Technical Education (AICTE), and Ministry of Education’s Innovation Cell has announced their strategic collaboration which aims to empower Atal Tinkering Lab school (ATLs) students for world-class future-ready

Agriculture Min signs MoU with Microsoft to develop smart interface for farmers

Union Ministry of Agriculture and Microsoft India has inked a Memorandum of Understanding (MoU) for a pilot project in 100 villages of six states to develop farmer interface for smart and well-organized agriculture, including post-harvest management and distribution. The pilot

NIXI inaugurates new initiatives to improve IPV6 adoption

Ajay Prakash Sawhney, Secretary Ministry of Electronics & Information Technology (MeitY) & Chairman NIXI has inaugurated three initiatives of the National Internet Exchange of India (NIXI). With this launch, NIXI has announced to play a supporting role for the IPv6 aw

India’s Second Wave crosses 2-lakh milestone

The Second Wave in India seems unstoppable. The number of daily new cases crossed the 2,00,000 figure on Thursday morning, which is the highest ever anywhere in the world. Most of the burden – 81 percent cases – is from ten states with Maharashtra continuing to lead the tally. The national capi

Govt approves stepping up of Remdesivir Drug production

The government has reviewed the issue of availability of Remdesivir Drug and has decided to increase the production and decrease the price of the drug. The government has​ also issued a ban on its export. Remdesivir is the first drug approved by the FDA for treating the SAR

NCSC Online Grievance Management Portal for scheduled castes

Union Minister for Communication & IT and Law & Justice Ravi Shankar Prasad launched the Online Grievance Management Portal of National Commission for Scheduled Castes (NCSC) in the presence of Minister of State for Social Justice & Empowerment Shri Rattan Lala Kata

Visionary talk series with Nupur Sharma, National Spokesperson, BJP



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter