The government may introduce two key financial sector bills, including the proposed law for facilitating privatisation of public sector banks as announced by the finance minister in the Budget. The government is also likely to table amendments to the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013, to enable separation of the National Pension System Trust (NPS) from the PFRDA for ensuring universal pension coverage.
The government is likely to table amendments in the Banking Regulation Act, 1949, during the forthcoming Winter Session of Parliament, sources said. Apart from this, amendments would be needed in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, for privatisation of banks, sources said.
These Acts led to the nationalisation of banks in two phases and provisions of these laws have to be changed for the privatisation of banks, they said. A month-long winter session of Parliament is expected to start by the end of the next month. The second batch of Supplementary Demands for Grants, allowing the government to undertake additional expenditure other than the Finance Bill, would also be introduced for approval.
Finance Minister Nirmala Sitharaman while presenting the Budget for 2021-22 had announced the privatisation of public sector banks (PSBs) as part of disinvestment drive to garner Rs 1.75 lakh crore. "Other than IDBI Bank, we propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22," she had said.
For ensuring privatisation of a general insurance company, the government has already received approval from Parliament for the General Insurance Business (Nationalisation) Amendment Bill, 2021, in the monsoon session ended in August 2021. With the amendment in the PFRDA Act, sources said, powers, functions and duties of NPS Trust, which are currently laid down under PFRDA (National Pension System Trust) Regulations 2015, may come under a charitable Trust or the Companies Act.
The intent behind this is to keep NPS Trust separate from the pension regulator and managed by a competent board of 15 members. Out of this, the majority of members are likely to be from the government as they, including states, are the biggest contributor to the corpus. The Trust was established by PFRDA for taking care of the assets and funds under NPS. The proposal to separate the two job roles has been under consideration for the last couple of years.
The PFRDA was established for promoting and ensuring the orderly growth of the pension sector with sufficient powers over pension funds, the central record keeping agency and other intermediaries. It also safeguards the interest of members.
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