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Cabinet approves Bill to amend Banking Companies Act
By agencies
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Friday, 05 August 2005, 19:30 IST
NEW DELHI: Government tonight approved a bill aimed at ensuring its majority in board of directors of PSU banks and said there was no proposal to reduce its stake below 51 percent in these banks.
The bill will amend the Banking Companies (Acquisition and Transfer of Undertakings) Act to increase the number of wholetime directors from two to four and restrict the number of shareholder directors at three in PSU banks, Information and Broadcasting Minister Jaipal Reddy told mediapersons after a Cabinet meeting.
The Bill, to be introduced in this session of Parliament, is aimed at ensuring government majority in board of directors of PSU banks, he said adding there is no proposal to reduce Government equity below 51 percent.
The bill also relates to setting up of a financial restructuring authority for potentially weak banks and makes other necessary changes to enhance flexibility in the Board of the banks and improve corporate governance, Reddy added.