Ordinances to speed up bank reforms

MUMBAI: The government has decided to take the ordinance route to push through key legislative amendments that are necessary to fill in regulatory gaps ahead of global challenges.

Finance minister P Chidambaram on Saturday said the government is planning to go ahead with half-a-dozen pending legislations either by way of ordinances or through Parliament during the winter session.

Addressing the annual general meeting of the Indian Banks'' Association in Mumbai on Saturday, Chidambaram said there is a need to prepare the regulatory environment for the new WTO regime which will come into force next year. Besides Basel II, which involves tighter capital adequacy norms drafted by an association of central bankers worldwide under the aegis of the Bank for International Settlement, Basel will also be applicable from 2006.

“The government is conscious of amendments in laws that are required. But thanks to a dysfunctional Parliament we have to take the ordinance route," said Chidambaram. He added that since the regulatory gaps cannot remain unfulfilled, the government will pass half a dozen legislations either by way of ordinances in the next three months or through Parliament during the winter session.

Chidambaram did not specify the laws he was referring to. However, the bills that are pending include an amendment to the Securities Contracts Regulation Act to enable corporatisation of stock exchanges and development of the derivatives market.

Another bill to operationalise the Credit Information Bureau, which will maintain a credit history of retail and corporate borrowers in the country, is also pending.