In Parliament: Postponing bills to privatize banks and cryptocurrencies

Thanks to frequent turmoil in Parliament, along with upcoming assembly elections in five states, including Uttar Pradesh, three major financial sector bills, which were supposed to be introduced in the winter session, are unlikely to come before the session ends next week. . The session may now end ahead of schedule on either Monday or Tuesday, instead of Thursday, as originally planned. These laws are the “Ban All Private Cryptocurrency” Act, another to amend banking laws to facilitate the privatization of public sector banks, and a third to amend pension laws to give more flexibility to the relevant regulator on how to invest a post-retirement pool. .

Prior to the winter session, the government had incorporated 26 new bills, including the three bills mentioned above. However, all three bills as well as the draft reforms in the power distribution business seem to have been taken off the table. over there

It is just a “far possibility” that these bills will be introduced in the current cycle, sources familiar with the matter told FE. Due to a brawl by the opposition in Parliament, approval of the supplementary application for grants for the total additional spending of Rs 3.74 crore has been put on hold and is likely to be taken up on Monday or Tuesday.

“Friday was sort of the last day for bills to be submitted,” an official said. On Friday, three more bills were introduced in Lok Sabha, including Chartered Accountants, and the Costs, Works and Company Secretaries (Amendment) Bill 2021, with the aim of reforming and accelerating the disciplinary mechanism for professionals in these areas.

On the first day of the session on November 29, the government introduced and passed a bill to withdraw the three laws regulating agricultural marketing, in the face of resolute and prolonged protests by large sectors of farmers.

The government appears to be gaining more time on the bill to ban private cryptocurrencies, which remain unregulated in India. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, aims at a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. The bill also allows some exceptions to promote the underlying technology of cryptocurrencies and their uses in the private sector. The government is also reportedly planning to amend the income tax laws to include cryptocurrencies under the tax net, with some changes expected in the next budget. SEBI, a stock and commodity market watchdog, may oversee cryptocurrencies and regulate the affairs of the exchanges that deal with them, as the government considers classifying cryptocurrencies as financial assets, according to industry sources.

With unions of bank employees observing two-day strikes on December 16-17 and more such protests planned ahead of the upcoming council elections, the government appears to have abandoned the plan to introduce a bill to amend the Banking Companies (Acquisition and Transfer of Pledges) laws, 1970 and 1980 and the occasional amendments to the Regulatory Act Banks, 1949, to enable the privatization of two public sector banks. According to the sources, NITI Aayog has already recommended the sale of the Indian Overseas Bank and the Central Bank of India to the core group of DID trustees, headed by Cabinet Secretary.

The Pension Fund Regulatory and Development Authority (Amendment) Bill seeks to make PFRDA the regulator of corporate-managed pension funds for its employees in order to bridge the regulatory gap. The bill also proposes relaxing the rules to allow more products other than annuity products to mandatory invest 40% of the pool of subscribers at the time of exit from the National Pension Scheme (NPS). With returns from an annuity on decline (now around 5%/yr), the proposed change would allow 40% of a pool to be invested (after giving a 60% lump sum at exit) in other products such as NPS’ regular withdrawal plans or inflation-linked annuity products.

The government intends to introduce the Direct Benefit Transfer (DBT) mechanism through amendments to the Electricity Act to restrict the power distribution companies (harassment) from submitting abusive subsidy claims to recover the amount from the respective state governments. Sources said that the Union’s Ministry of Electricity dropped the electricity subsidy disbursement plan to eligible consumers such as farmers and families through the DBT system for fear of backlash. The bill could be taken up next year.