Consenses seems to have finally been reached within the Congress-led United Progressive Alliance government over two key financial sector reform bills with Finance Minister Pranab Mukherjee seeking Cabinet approval for the Pension Fund Regulatory and Development Authority Bill, 2009 and a Bill to amend the State Bank of India Act, 1955.
The PFRDA Bill, which lapsed earlier, seeks to give statutory powers to the pension regulator to develop and regulate a national pension system for providing old-age security to the government as well as the unorganized sector. On the lines of the insurance sector, the Bill specifies a foreign investment limit of 26 per cent in pension funds.
The Bill, originally introduced in Parliament in 2005, could not be cleared due to stiff opposition from Left parties. It was then referred to the Parliamentary Standing Committee on Finance, which recommended the Bill with some modifications.
Following the passage of the Bill, the PFRDA will be empowered to frame regulations, operate, monitor and supervise the National Pension Scheme launched for civil servants in April 2008 and extended to all citizens in May this year.
The SBI (Amendment) Bill proposes to bring government holding in the countrys largest bank at par with other nationalised banks at 51 per cent. As per the SBI Act, the holding of the promoter, that is the government, cannot come below 55 per cent. At present, the government holds 59.73 per cent stake in SBI.