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Union Cabinet approves Proposal to introduce the Financial Resolution and Deposit Insurance Bill 2017

The Union Cabinet has approved the proposal to introduce a Financial Resolution and Deposit Insurance Bill, 2017 which will provide a comprehensive resolution framework for financial sector entities to deal with bankruptcy situation in banks, insurance companies, and other entities.

Salient Highlights

The bill will pave way for the establishment of Resolution Corporation. The Resolution Corporation would be mandated to protect the stability and resilience of the financial system; protecting public funds; protecting the consumers of covered obligations up to a reasonable limit.

Once enacted, the Financial Resolution and Deposit Insurance, Bill 2017 will result in repealing of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 and repeal/amendment of other resolution related provisions in sectoral acts. With the repeal of Deposit Insurance and Credit Guarantee Corporation Act, 1961, the deposit insurance powers and responsibilities will be transferred to the proposed Resolution Corporation.

The new bill will complement the Insolvency and Bankruptcy Code, 2016  by providing a comprehensive resolution framework for the financial sector. The Insolvency and Bankruptcy Code, 2016 was enacted recently to deal with the insolvency of non- financial entities.

The bill envisages to inculcate discipline among financial service providers in the event of financial crisis. It is expected to maintain financial stability in the economy by limiting the use of public money to bail out distressed entities. It will put in place adequate preventive measures and at the same time proposes to provide the necessary instruments for dealing with an event of financial crisis

The bill is proposed to be enacted to strengthen and streamline the current framework of deposit insurance and to decrease the time and costs involved in resolving distressed financial entities.

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Real Estate Act comes into effect

The Real Estate Act which aims to protect the interests of homebuyers by ensuring transparency has come into effect. The Ministry of Housing and Urban Poverty Alleviation (HUPA) has asked all the states and Union Territories to implement the Act with letter and spirit. Since land is a state subject, real estate sector comes within the ambit of the state governments.

The Real Estate (Regulation and Development) Bill, 2016 was passed by Parliament in March last year. Partially, the act came into force on 1 May last year with 59 of 92 notified sections of the act coming into force. The remaining provisions have come into the force now. Already the act has been notified by 13 states and Union Territories including Andhra Pradesh, Uttar Pradesh, Bihar, Gujarat, Delhi, Daman and Diu.

Salient Provisions

Buyers and developers of real estate property can seek relief by approaching Real Estate Regulatory Authorities against violation of the contractual obligations and other provisions of the Act.

The act provides for the mandatory registration of projects and real estate agents.

The act mandates depositing 70% of the funds collected from buyers in a separate bank account for construction of the project. The funds could be withdrawn only for construction purposes.

The act prescribes penalty on developers if the project is delayed. The project developers are required to disclose the project details on the website of the regulator and need to provide quarterly updates on construction progress.

Under the act, the Regulatory authorities are required dispose of complaints in 60 days and Appellate Tribunals will be required to adjudicate cases in 60 days.

Significance

The act will ensure transparency and accountability in the real estate sector. It will enhance the consumer confidence and will benefit the whole sector. It will help to attract more investments into the real estate sector and may also open gates for FDI. This act will aid in the effective implementation of projects such as Hosing for All by 2020 and Smart City.

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Motor Vehicles (Amendment) Bill, 2016: Key Provisions

The Lok Sabha has passed the Motor Vehicles (Amendment) Bill, 2016 by a voice vote to give more thrust to road safety, controlling pollution and accidents.

The bill seeks to amend the Motor Vehicles Act, 1988 that provides for legal standards for motor vehicles, grant of driving licenses, and penalties for violation of these provisions.

Key Provisions

  • National Transportation Policy: Union government must frame National Transportation Policy, in consultation with the states.
  • Recall of vehicles: It empowers Union government to order for recall of motor vehicles if a defects in the vehicle may cause damage to the environment, or the driver, or other road users.
  • Motor Vehicle Accident Fund (MVAF): Mandatory for Union government to constitute Motor Vehicle Accident Fund to provide compulsory insurance cover to all road users in India.
  • MVAF will be credited with cess or tax as approved by Union government, grant or loan made by Union government or any other source prescribed by Union government.
  • Care for road accident victims: Union government will develop a scheme for cashless treatment of road accident victims during golden hour.
  • It defines golden hour as the time period of up to an hour following a traumatic injury, during which the likelihood of preventing death through prompt medical care is the highest.
  • Compensation for death: It increases the compensation for death in a hit and run case from to Rs two lakh or more from Rs 25,000, as prescribed by the Union government.
  • Protection of good samaritans: It defines a good samaritan as a person who renders emergency medical or non-medical assistance to a victim at scene of an accident in good faith, voluntary and without the expectation of any reward.
  • Good samaritans will not be held liable for any criminal or civil action for any injury to or death of an accident victim. Union government may frame rules to provide for procedures for their questioning or disclosure of personal information.
  • Aggregator services: It defines an aggregator as a digital intermediary or market place and their services may be used by a passenger to connect with a driver for transportation purposes.
  • It makes mandatory for these aggregators to obtain licenses and comply with the Information Technology Act (IT), 2000.
  • Electronic services: The Bill provides for the computerization of certain services to improve delivery of services to the stakeholders using e-Governance.
  • It enables (i) online learning licenses, (ii) increases period of driving licenses validity, (iii) Do away with the requirements of educational qualifications for transport licenses etc.
  • It also proposes Aadhar based verification for grant of online services including learner’s licence to ensure the integrity of the online services and stop creation of duplicate licences.
  • Offences and penalties: It increases the penalties for several offences under the parent Act for high risk offences like drunken driving, dangerous driving, overloading, non-adherence to safety norms by drivers.
  • Offences committed Juveniles: The owner or guardian will be deemed guilty in cases of offences by the Juveniles. Juvenile will be tried under JJ Act and the registration of Motor Vehicle will be cancelled.

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