New Delhi: A bill which seeks to deal with the insolvency of financial service providers was on Thursday referred to a joint committee of Parliament.
'The Financial Resolution and Deposit Insurance Bill, 2017', was introduced in the Lok Sabha by Minister of State for Finance Arun Ram Meghwal.
Soon after, it was referred to the 30-member committee comprising members of both the Lok Sabha and the Rajya Sabha.
The committee is expected to submit its report during the next session.
The bill provides for the establishment of a resolution corporation with powers relating to the transfer of assets to a healthy financial firm, merger or amalgamation, liquidation to be initiated by an order of the National Company Law Tribunal.
It can also designate certain financial providers as systematically important financial institutions, the failure of which may disrupt the entire financial system, said the 'Statement of Objects and Reasons' of the bill.
It also provides for the creation of corporation insurance fund, corporation resolution fund and corporation general fund.
"The proposed legislation together with the Insolvency and Bankruptcy Code, 2016 is expected to provide a comprehensive resolution mechanism for the economy with the objective of protecting consumers of specified service providers and public funds thereby contributing to the stability and resilence of the financial system," the statement said.
Several opposition members, including Bhartruhari Mahtab (BJD), Adhir Ranjan Chowdhury (Congress) and Saugata Roy (TMC), objected to the decision to refer the bill to the joint committee, saying the move amounted to weakening the department related standing committees.
Mahtab wanted to know the "hidden agenda" behind referring the bill to the panel and not the standing committee.
Minister of State for Parliamentary Affairs SS Ahluwalia said that members should be happy that a joint committee is being set up to scrutinise the bill as its suggestion would be accepted by the government.
"You will more leverage as a member of the joint committee in suggesting changes to the bill," the minister said, adding there was no hidden agenda behind setting up the panel.
Updated Date: Aug 10, 2017 21:25 PM