Rajya Sabha passes two bills aimed at helping depositors and startups
- The bill to make sure depositors quickly get the insured amount for their deposits in case of a bank collapse, was passed after a short debate.
The Rajya Sabha on Wednesday cleared two key bills, one aimed at making the credit guarantee facility for bank depositors more efficient and the other to decriminalize limited liability partnerships (LLPs), amid uproar by opposition parties.
The bills were passed with a voice vote amid protests by the opposition members on the Pegasus snooping controversy and on the three farm laws that had been enacted recently.
Union finance minister Nirmala Sitharaman told the Upper House that the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill will help small depositors, including those of the stressed Punjab & Maharashtra Co-operative (PMC) Bank.
The bill to make sure depositors quickly get the insured amount for their deposits in case of a bank collapse, was passed after a short debate.
Bank depositors get a maximum cover of ₹5 lakh for their deposits, but often the payment in the event of a bank failure takes a long time.
The bill seeks to ensure that this payment is made within 90 days, even when the bank is placed under a moratorium.
It seeks to insert a section in the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961, to facilitate this. The move is significant as several banks, including PMC Bank, Yes Bank and Lakshmi Vilas Bank, had recently faced stress.
The legislation would also help depositors of 23 cooperative banks that are under stress, Sitharaman said while replying to the debate, news agency Press Trust of India reported.
“PMC Bank depositors will also benefit from this bill,” the minister said.
The bill also allows the DICGC to raise the ceiling on the premium, with the prior approval of the Reserve Bank of India (RBI).
The Upper House also cleared the Limited Liability Partnership (Amendment) Bill on Wednesday.
This bill seeks to decriminalize certain provisions and improve the ease of doing business.
A limited liability partnership (LLP) is a preferred legal form among startups. There are more than 200,000 LLPs in the country.
The bill is aimed at reducing penal provisions in the LLP Act from 24 to 22 and decriminalizing 12 provisions that are technical or procedural in nature where no criminal intent is involved.
PTI contributed to this story