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A parliamentary panel to examine the bank mergers and recapitalization schemes

A panel was framed to examine the regulations framed by UCO Bank, Indian Overseas Bank and Bank of India under section 19 of Banking (Acquisition and Transfer of Undertakings) Act 1970.

A Subordinate Legislation Committee of Parliament, that examines whether rules and regulations drafted by the executive are complying with the acts passed has decided to examine the mergers of selected public sector banks and bank recapitalization schemes of Centre. The main task of the committee would be too if the rules and regulations framed for purposes agree with the Banking Companies (Acquisition and Transfer of Undertaking Act) Act, 1970 and the Nationalised Banks (Management and Miscellaneous Provisions) Scheme of 1970. In the meeting, the members were also figuring out whether the UCO Bank, Indian Overseas Bank, Bank of Maharashtra and Bank of India have framed regulations recommending the legal framework of ensuring the safety of computerized data by section 3 (2G) of the Act. Adding to this also discussion about recapitalization schemes and NPAs were done. The members of the committee asked the representative of the department of financial services to furnish details of mergers and recapitalization schemes, before the panel and parliament.

Apart from this, the members suggested that Pension Fund Regulations of banks did not make detailed provisions about the functions of trusts like qualifications of trustees, the procedure of decision making. Lastly, the members asked banks to give inputs on the infirmities observed and the details of each of the banks' capital structures. Concludingly, the members believed that the mergers and the proposals to disinvest the public sector banks were in opposition to the banking nationalization scheme and shall not be done without prior approval from the Parliament.

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