The Rajya Sabha on Tuesday approved the State Bank of India (Subsidiary Banks Laws) Amendment Bill, paving the way for the Centre to exercise greater control on these Banks after transfer of powers from the Reserve Bank of India.
The bill, which was passed by a voice vote in the Upper House, will enable the bank to issue of preference shares to raise resources from the market.
The bill also aims to provide for flexibility in the management of the bank. It will empower the Centre, instead of the Reserve Bank, to approve change of the authorised capital of a subsidiary bank and also raising of issued capital by preferential allotment or private placement or public issue by the subsidiary banks;
"There are certain provisions in the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956 dealing with the approval of with the central bank in the management and functioning of the subsidiary banks.