Amendment Bill Current Affairs - 2020

Insolvency and Bankruptcy Code (amendment) bill passed in the Parliament

On March 12, 2020, Insolvency and Bankruptcy (Amendment) bill, 2020 has been passed in the parliament. It was earlier passed by Lok Sabha and is now being passed by Rajya Sabha.

Highlights

The amendments were earlier introduced as ordinances. Now after the Parliament session begun the ordinance was introduced as bill. And the bill has now been passed as an act in the parliament.

The amendment aims to protect the successful bidders of insolvent companies from risk of criminal proceedings. The criminal proceedings may be expected from previous promoters of the company.

Ordinance

The Ordinances are laws promulgated the President of India. The President issues ordinance on recommendation of Council of Ministers. An ordinance shall be issued only when the Parliament is not in session.

Ordinance in Constitution

Article 123 gives powers to the President of India to promulgate ordinance in India. An ordinance should be approved by the Parliament within 6 weeks of its reassemble. If not, the ordinance ceases to operate.

Finance Minister introduces bill to amend Banking Regulation Act

On March 3, 2020, Finance Minister Nirmala Sitaraman introduced bill in Parliament to amend banking regulation law to regulate cooperative banks. It aims to prevent frauds as that seen at Punjab and Maharashtra Cooperative Banks (PMC).

Highlights

The Banking Regulation (Amendment) Bill, 2020 intends to regulate 1,540 cooperative banks with total savings of Rs 5 lakh crores. It also aims to protect the small depositors that struggle a lot during frauds like that of PMC. The withdrawal limit of PMC banks was limited to Rs 1000 during the crisis. This had put several customers in an insecure environment.

Key Features of the Amendment

The amendments are being made only to multi-state cooperative banks and urban cooperative banks. The Cooperative Banks are currently under dual control of both RBI and Registrar of Cooperative Societies. With the amendment, RBI will have extra powers apart from regulatory functions such as capital adequacy and cash reserve. However, the administrative role of the bank is to continue with the Registrar of Societies.