After a long delay, two crucial Bills — Pension Fund Regulatory Development Authority (PFRDA) Bill as well as amendment to Banking Regulation Act — are expected to be taken up in the forthcoming Budget session of Parliament. These important two bills were hanging fire for quite some time due to opposition from Left parties. “The coming Budget would address many concerns of economic reforms, good news in the coming Budget will be pension reforms. We will table PFRDA Bill in the forthcoming session,” Minister of State in PMO Prithviraj Chavan said in Mumbai on Monday. The way ahead for the Pension Bill would be worked around the two major sticking points: the quantum of pension and the premium amount. So far, the Government has told the Left that monthly pension at half the average monthly pension based on the last three years’ salary, as the Left has demanded based on the existing format, would not be possible. The Left, in turn, has turned down the Government proposal for a higher premium for it to consider the demand for pension as per the present practice. The amendment in the Banking Act continues to be a big hurdle as it contains a proposal to lift the 10 per cent voting ceiling in banks. “It’s slightly difficult as Left parties are opposing the proposal. If the government manages to pass the amendments, there would be consolidation in the sector and revision in the valuation,” said a banking analyst with a leading broking firm, adding, “We will have to keep our fingers crossed. There was no political consensus on the issue.” In fact, private and foreign banks will see a major consolidation in the form of mergers and acquisitions if the voting cap issue is resolved. There could also be a rise in foreign direct investment in banking. The amendment to the Banking Act also allows the banks to issue the perpetual non-cumulative preference shares eligible for inclusion in Tier-I capital and redeemable cumulative preference shares eligible for inclusion in Tier-II capital.
