Major Bills to reform labour,
financial sector laws introduced in Lok Sabha
August 10, 2017
Bills — one consolidating the labour laws around wages and
the other introducing specialised resolution process for failing
financial services providers — were introduced in the Lok Sabha
Besides seeking to amalgamate, simplify and rationalise four
central labour enactments relating to wages, the ‘The Code on
Wages Bill 2017’ would also widen the scope of minimum wages to
all workers (including those in the unorganised sector), Union
Labour Minister Bandaru Dattatreya told the Lok Sabha while
introducing the Bill.
The four central labour enactments relating to wages that are to
be amalgamated are the Payment of Wages Act 1936; The Minimum
Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal
Remuneration Act 1976.
The government also took a big step towards ushering in a
specialised resolution process for failing financial services
providers, thereby contributing to the stability and resilience
of financial system.
For this purpose, a new Bill – The Financial Resolution and
Deposit Insurance Bill 2017 —was introduced in the Lower House
by Arjun Ram Meghwal, Minister of State for Finance. This Bill
was later referred to a Joint Committee of the Houses consisting
of 30 members, 20 from Lok Sabha and 10 from the Rajya Sabha.
The Opposition parties’ MPs in the lower house were upset on two
counts — both these Bills were circulated at 9 am on Thursday
and secondly the Financial Resolution Bill was being referred to
the Joint Committee of Houses instead of a Standing Committee on
Finance. At present, there is no specific law in India for
resolution of failures of financial services providers. The
recently enacted Insolvency and Bankruptcy Code 2016 does not
automatically cover financial service providers.
This new Financial Resolution Bill will seek to regulate
financial service providers including banks (not cooperative
banks), insurance companies, financial market infrastructure,
payment systems, non-banking finance companies so as to comply
with the emerging international norms for establishing effective
resolution regime for financial sector, official sources said.
The proposed Financial Resolution and Deposit Insurance Bill
2017 together with the Insolvency and Bankruptcy Code 2016 is
expected to provide a comprehensive resolution mechanism for the
Indian economy with the objective of protecting consumers of
specific service providers and public funds, official sources
The Financial Resolution Bill will also pave the way for
creation of Resolution Corporation and confer on it certain new
methods of resolution such as bail-in and bridge service
Meanwhile, Lok Sabha on Thursday also gave its nod for a Bill
enabling the consolidation of the SBI associate and Subsidiary
Banks with the parent bank State Bank of India.
Although the consolidation has been effective from April 1, the
legal sanctity for this arrangement is now being provided.
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