PREVIOUS HOUR

-SSS/NBR-SCH/2X/3.00.

SHRI T.R. BAALU (CONTD.): By leveraging I can get from NABARD Rs. 16,500 crores and the Budgetary provision is Rs. 16,500 crores. All put together comes to Rs. 48,000 crores. So, unless you support me, through this Bill, where can I go for funding? So, I request both my friends, the former PWD Minister and Shri Pani, also to vote for this Bill.

MR. DEPUTY CHAIRMAN: There is also another Minister from Uttar Pradesh sitting here.

SHRI T.R. BAALU: At the same time, the hon. Member was mentioning about 'unlimited powers.' We are not going in for levying any cess. I come before the House only with a minor amendment so as to go in for leverage. That is all. So, I don't think this needs any elaborate discussion in this House. He wanted to know where from I get money. I will get money only from the NABARD or the RIDF.

Sir, Prof. Bhandari was asking about Bihar roads. Sir, I wish to submit that not only Bihar but wherever there are roads, we will take them up provided they fall within the prescribed norms. For converting any road into four-lane, there should be a road density of 15,000 and more. Wherever we have this density, we will, definitely, go in for four-laning. Sir, we are considering four-laning of about 890 kms of new roads or extension of roads into four-laning in Bihar and in each and every State will have its own share of road expansion. For this, we are going to spend Rs. 2.27 lakh cores before 2011-12 only by way of cess which you have levied or we have levied. But, at the same time, we should have an enabling provision and it is precisely for that I have come before the House for its consideration. Thank you. (Ends)

ָ ֻ ӛ־ֻ: ֳ֯ן , ״֮֙, ־ֻ ו֮ ֛ ׻֙ ֲָ , ָ ָָ ? ֮֮ ֤ ֻ-ֻ ֟ , ָ ֵ֤ ֟ , ױ ™ָ֓ ֛ ֻ-ֻ

ֳ֯ן: ָ כ ֵ֟

׻֟ ֟: , ؓ֟ ֮֮ߵ ӡ , ؓ֟ ו , ֻ֮ և ו ײֻ ו , ו֮ ׌׾֙ ִ ׻֋ ־ֿ ֯ ֋ , ֋ ֲ ֯ ָ ֻ ׻֋ 16,500 ֵ ָ , ֋, ֮ ..(־֮֬)

MR. DEPUTY CHAIRMAN: It is only an enabling provision.

׻֟ ֟: ִ ֮֜ ׻֋ ־ֿ , ׮־ ֟ ו ֟ ֓ ֮֯ , ׻֋ ֲ և ֮ ֛ ־ֿ , 2009 ן׸ ֜ ֲ֤, ױ ֤ 2,00,000 Ӿ, ו ׻֋ ֯ ֮ , ׻֋ ߕ ֯ Consolidated Fund ֜և, ִ ָ ֟ և ֮ ׮־

SHRI T.R. BAALU: We get loans. There should be some provision to repay the loan. That is why I am before you and request you to pass this Bill.

MR. DEPUTY CHAIRMAN: The question is:

That the Bill further to amend the Central Road Fund Act, 2000, as

passed by Lok Sabha, be taken into consideration.

 

The motion was adopted


MR. DEPUTY CHAIRMAN: Now, we shall take up Clause-by-Clause consideration of the Bill.

Clauses 2 and 3 were added to the Bill

Clause 1, the Enacting Formula and the Title were added to the Bill

 

SHRI T.R. BAALU: Sir, I beg to move:

 

That the Bill be passed.

The question was put and the motion was adopted

(Ends) (FOLLOWED BY USY "2Y")

-NBR-USY/MCM/2Y/3.05

 

STATEMENT RE. IMPLEMENTATION OF RECOMMENDATIONS CONTAINED IN SIXTEENTH AND NINETEENTH REPORT OF DEPARTMENT-RELATED PARLIAMENTRY STANDING COMMITTEE ON COAL AND STEEL.

 

֮ ӡ ( ߿ ִ ) : , ׮ִ׻֟ ִ֮ ֌־ ֳ ֙ ָ ֟ :

(i)                   ׾ֳ Ӳ׬֟ ֻ ï֟ ӲӬ ֤ߵ ãֵ ״ן ן־ ӟپ™ ֱ׸ ֵԮֵ֮ ãןօ

(ii)                 ׾ֳ Ӳ׬֟ ֻ ï֟ ӲӬ ֤ߵ ãֵ ״ן ־ ן־ ӟپ™ ֱ׸ ֵԮֵ֮ ãןօ

(ENDS)

THE STATE BANK OF INDIA (SUBSIDIARY BANKS LAWS) AMENDMENT BILL, 2007

 

THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PAWAN KUMAR BANSAL): Sir, I move:

"That the Bill further to amend the State Bank of Saurashtra Act, 1950, the State Bank of Hyderabad Act, 1956 and the State Bank of India (Subsidiary Banks) Act, 1959, as passed by Lok Sabha, be taken into consideration.

Mr. Deputy Chairman, Sir, with the introduction of the new capital adequacy framework (Basel II) all the banks, including subsidiary banks of the State Bank of India, may be required to increase their capital base to meet minimum requirements. This will improve their international credibility since banks in many countries are also in the process of adopting these standards. To enable the subsidiary banks to raise resources from the market, to meet minimum capital requirement under Basel II and to expand its business, to comply with guidelines of the SEBI and Depositories Act, to remove restrictive provisions of the State Bank of India (Subsidiary Banks) Act, to facilitate more public participation in the shareholding and to make other necessary changes, such as, 'fit and proper' criteria for elected Directors, adoption of balance sheet in the AGM, increasing the number of elected Directors, etc., the State Bank of India (Subsidiary Banks Laws) Amendment Bill, 2006 was introduced in the Lok Sabha on 22nd May, 2006. The Bill has been passed by Lok Sabha on 15th May, 2007.

With these words, I commend that the State Bank of India (Subsidiary Banks Laws) Amendment Bill, 2007, as passed by Lok Sabha, be taken into consideration by this august House.

The question was proposed.

ִ֤ Ͼֻ (֕ã֮) : ֳ֯ן , Ù כ (ײ֛ ) ײֻ, 2007 ֤ ׾֢ ӡ ß ֳ ׾ָ ָ Ͽ ֯ ׻֋ ֋ ֟ ־֕ ֕ ײֻ ִ֬ 00և0 ײ֛ , ֵ֯ ר ׻֋, ӓ֟ ָ ׻֋ ־ ײֻ ָָ ֮ ׬ָ ֯ , ִ ֯ע Ͽ ֟ ו ֌ ֻ֮և֮ ׸ãןֵ ֕ ׸ãןֵ ֛ ӟָ ֻ֮և֮ ֤ ָ Ùָ پ ״׮Ù֮ ֻ֟ ֲָ ו Ԯ ִֵ ד֟ օ ָ ִ֟ ד֟ ָ ֻ֮և Ù כ ֯ , ָ ־ã ״׮Ùיֻ ֮֋ ו ׯ֙ և ֣ ï֨ ֣ ֲֻ ֛ ׻֋ ß־ פ Ù כ ֲ֛ ָ ֮ ׻֋ ׯ֙ ֮֜ ׻֋ ֳ֯ן , ײֻ ָכ Ù؛ և כ ָ ׾ֿ ָ ֓ և כ ߴ֮ ָ֤֕ օ ֻ 000 같 ֙ כ ֣ ־ָ ֻ , ִ֣Ԯ ׾ָ ֮, ֳ֯ן , -߮ ֟ ֯ ִ֮ ß (2Z ָ ֿ:)

GS-VP/3.10/2Z

ִ֤ Ͼֻ (֟) : Ͽ , ֤ ֮ ֟ ֯ ִ֮ օ Ͽ , ו֮ ָ ׾֢ ӡ ֮ ֲ־ ִֵ, ֟ ָ ֿ My first question is this. Will the shares of these subsidiary banks be traded freely? Secondly, I want to know whether FIIs will be allowed to purchase shares. Thirdly, will the money, received through IPOs, be invested in insurance business or in industrial sector or in any such SSI or tiny sector? Fourthly, will the SBIs holding be reduced to 51 per cent, i.e., by about four per cent shares? They are holding, at the moment, 55 per cent, and it will be reduced to 51 per cent. I think, by reducing this four per cent shares, they will get huge money. I do not know how much money the Finance Minister will get through disinvestment of these four per cent shares. I would like to know how much money they are expecting by way of this offloading four per cent shares. Sir, I would like to know whether by this sort of offloading of the shares of the State Bank of India from these subsidiary banks, the money will be invested in infrastructure sector or it will be invested in commercially ׮ױי Ù , Ӥ Ù Ùָ Ù

ֳ֯ן , Ͽ ׻֋ ֵ פ þֵ ׾֢ ӡ ֛ ܟ ֲ ֟ ֯ ו֮֟ Ù ׻֋ ֻ ï™ , "We have impressed upon them, that is, on the banks, that they would have to rebalance their portfolios so that adequate credit is available to productive sectors. "

 

ֳ֯ן , ֟ ׻֋ ֱ ֲֻ , ֵ׸ߕ, ֻ֮և֮ ֌ ֮ ִו , ִו ֮ ׻֋, ָ߲ ִ ֤ ֮ ׻֋, ִ ׾ ׻֋ ֮ ֮֬ ִ ֓ Ù ָ ׻֋ ꌙ ֋ֆև  ִ֬ ֵ֮  ִ֬ ִ ִ֬ ־ ֵ, ִ ֮ Ù , ָ ֵ ֵ օ ֟ ֯ , þֵ ׾֢ ӡ פ ִ֮ , ִ ֛ ֱ ֲ ֟ þָ , , " While credit to commercial real estate sector saw 59 per cent increase from Rs. 25,429/- crores, as on March 2006, to Rs. 40,270 crores, as on March, 2007."

ֳ֯ן , ֱ-ֱ ֲֻ֟ ׸ֻ Ù ײ֮֕ ֻ ֵ ֟ ָ ֮ פ ָ߲ ֤ ֈ ׻֋ ӛÙ ׻֋, ֮֬ ־ ֟ , 59 ָ ֮  , ו ־ֿ ָ ׾֢ ӡ ֲ ֮ ־֮ ֛ ־ã ֟ ׸, ־ã , ָ ָ ֻ ו ָ ָ , ָ ֣ ִ֙ ֵ , ָ ֕ ָ ָ, ֯ ִ֮ ֟ ֳ֯ן , ָ ֟ ָ ֻ֮և֮ ֮ , ֯ ֵ ו֮֟ ײ ևԯ߆ ֱ ָ ػ כևÙ , ִ ֤ ֵ֤ ײֻ ֱ ֮ ״ֻ֟ օ (3 ָ ָ)

-GS-VP/SC-PK/3.15/3A

ִ֤ Ͼֻ (֟) : ׻֋ ױ Ù ׾֢ ӡ ֟ ־ֲ ו֮֟ ֯ , ָ ևԯ߆ ִ֬ , ֵ ֱÙָ ִֻ֯ , ִ ׾ ֵ ִ Ӥ ָ ֲֻ ֮ ־ ָ ֮ ָ ꌙ ֟ ֻ ֋ ָ ָ ֣ ״֟ ֋? ׻֋ Ͽ ֯ ִ֮ , ָ ׾֢ ӡ ֮ ꌙ ֟ , ִ to increase the number of elected Directors in these banks. ָ, ֯ ֮ ֮ - ׾֢ ӡ , ִ פ ֲָ ֵ , ֵָ ևә ֋ ֛ ִ ߅ ׮ֵ ֵֿ ֮ ܵ , 꿮ֻև ֵָ ևә ֋ ָ ֛ ֮ ֜ ֮ ֵ -֛ ׌, ֮ - ֲ ֵָ ֮ פ ֵ , ֲ ֵָ ֋ ׾֢ ӡ ָ ׬ָ ? ָ և׸ , Ӥ ֵָ ևә ׻֋ ֻ , ݵ ׌ , ױ , ִ ֯ע ו ָ ևә ֋ , ܵ ׻֋ ֛ ׿ ִ֟ ָ ־ָ ֯׌ ׻יև֮ - ד֟ ֯ ֣Ԯ ָ ֯ ֮ ï™ ͅ , ֟ , ֤ ֮ ֟ ִ֯ օ ߓ ָ ֤ ֓ ֛ ֵֿ ֟ , և ֯ߕ և ִ ֟ - ׾֢ ӡ ֕ ӡ , ֯ ׻י ײו̮ , ײו̮ - ׻י׿ֵ֮ ֮֮ ֯ ֵ? ׻י׿ֵ֮ ? ׻י׿ֵ ָ ? ֮ ? ׻י׿ֵ֮ ׸ ֋? ׻י׿ֵ֮ ֯ ֮ ָ֤ ֮֟ ײ׻֙ ֮ ֲָ ? ִ׮֟ ־ֵ , ֯ ֣ ָ ־ָ ? ׾֢ ӡ ֟ ï™ և , ײ ꌙ , ָ ־ָ ֣ ֯ߕ ֣ ׬ָ Ӥ ׸ ִ֮ ׸ ׬ָ ֯ ֛ ׌ Ծָ, ד֟ ִ֮֮֕ ־ָ ֵ , ִ֟ ׾֢ ӡ ָ ֿ , ߓ ֮ ֓ԋ ֋ֆև ꌙ ״ֻ֮ ֋ֆև ꌙ ֛ ִ׮֟ , 45 ןֿ֟ ֯ כ, ֋ֆև ꌙ ֟ , և ꌙ ֟ ֕ ֮ ״ֻ֟ ָ ָ , 꿮և ֋ , ֳ ߙ ֵ ֤ ֱ ״ֻ֟ , ָ ֤ ״ֻ֟ , ָ ־Ù , ִו ֮ ־ֿ , ִו ֲָָ ־ֿ ָ ָ֮ ֋ ꌙ ָ ֛ ٣ ٣ ֛ ֵ (3-֯ ָ ֟)

MP/3B/3.20

ִ֤ Ͼֻ (֟) : ׾֢ ӡ ..և.  ׮ , ָ ָ ֲֻ ֮ ֛ ֮֬ ֛ ֮֬ ָ ָ ӓ ֋, ׾֢ ӡ ׮־ օ

ֳ֯ן , ןִ ׾ֵ , פ ֕֙ ֵ ֙ ֵ ָ և, ֮ 2 ָ ֯ , 2 ָ ? ָ  Ӥ פ, Ӥ פ ָ ֮ ֟֋ ֜, ָ ֮ ׾֬֋ ֜, ָ ֮ , ֤ ִֵ ָ ײֻ֕ ׯ և ֕ ״ ֤ ָ ֕ ָ ָ ֓ ֕ և ß , և ָ֮ ָ֮ ? ָ ָ ָ ֟ ֚ ָ , - ָ , ָ ָ , ֵ֤ ֕ ֛, ָ ֛, ֮ ֮ ׻֋ ָ ָ ֟ , ֻ֟ ןֵ ׸ִ , ֻ֟ ־ã ׸ִ ֮ ִֵ ָ , ִֵ ָ ֲֻ ֵ ׸ִþֺ ָ ֤ ֙ ֵ 2 ָ ֯ ֵօ

, ׾֢ ӡ þֵ ؓן֟ Ϭ֮ ӡ פ ׬׸ ִ֮ ֟ ָ ׾ , ִ ֲֻ ֵ ֮ , ִ פ ֲֻ ֮ ֕ ָ ֮ , ֲ ֛ tragedy , ֮֯ ָ , Ù כ ֓ , ֟ , Ù כ ׯ֔ ָ ןִ ׸ͻ ֵ , ִ ױ פֵ ֤ ֮ ױ , ױ ןִ פֵ , ױ ֟ , ׾ָ , ֮֮ ױ ֮ ? ָ߲ ֤״ֵ ָ ֤ әÙ ֮ ? ֈ ׻֋, ׻֋ - ׻֋ ֯ әÙ ֜֟ ֱ ֜ ִ֯ӣ ֣ ֟ ֟ ? ֻ ߙ ֮ ֮ և ? ֮ ױ ִ ֋ ? ײ  ׮֙ , ֕ ֲָ ֵ ֓ ָ ֵ ׸̾ ֛ , ֟ , ו֮ ֵֿ ֵ ָ ָָ , ֵ ָ , ֮ ֛ ֮֬ ֲֻ ֤, ֮ ֛ ֮ ָ ־֕ ֕ ֤ ֙ ? ..և. ֤ ֙ ? ֕ ָ߲ ״ֻ , ָ ֜ , ָ ָָ ָ ӯ ֮ ָ ֓ ָ ֵ ? ׸̾ ֛ , ָ ײ  ӛÙ ֵ ָָ ֵ ֮֯ ֮ , ִ ֟ ֮ פ ֵ? ָָ , ׸̾ ִ ֤ ֳ ֮օ ָ , ... , ֳ ֮ ִו ™ ֵ ָ ׻ֵ , ֵ֤ , , ֛ ָָ ֟ ָ ֮ פ ׸ִþֺ ָ ָ߲ ׾ßָ ו ָ և ָ ӟ , ו ָ ֛ ֑֟ , ִ֟ ׾֢ ӡ ֟ ָ ֺ ׾ָ֓ ֲ ֣ ֯ ֮־֤ ֮֯ ֮ פօ (ִ֯) (3 /- ָ )

3c/3.25/skc

PROF. P.J. KURIEN (KERALA): Sir, at the outset, I would like to say that I support the Bill. As mentioned in the Statement of Objects and Reasons, the SBI Act of 1959 had imposed certain restrictions on the shareholders of the subsidiaries of the SBI and other banks such as the Bank of Saurashtra, the Bank of Hyderabad, etc. It is necessary to remove these restrictions. In the General Body Meeting, the shareholders themselves had demanded that these restrictions should be removed. These restrictions are also mentioned in the Statement of Objects and Reasons and so, I don't want to repeat them. This Bill has been brought about to do away with these restrictions and I welcome this Bill.

Sir, as per the basal record of capital adequacy which we had adopted in 1992 -- that has been revised and new basal adequacy norms have been introduced in 2004 -- we also need to bring our banks to international standards. Therefore, these amendments are needed; the capital base of banks need to be increased. That is needed to maintain the international credibility of the bank. Therefore, this Bill was necessary and is a welcome measure.

Having said that about the Bill, I would like to make some points and a few suggestions to the hon. Minister. The other day, the hon. Finance Minister, in reply to a question on NPAs, had said that NPAs were coming down. Now, we know that when a poor, ordinary man takes a loan of one lakh rupees or 50,000 rupees, and when he is not able to pay it back, the banks go after him and thus, force him to commit suicide. Farmers commit suicide because banks are after them for repayment of a small amount, but big sharks with crores and crores of rupees are not paying and that is why NPAs get accumulated. If we look into the NPAs, we find that these are caused by big industrialists. I appreciate the efforts made by the Government to bring down NPAs. The Finance Minister has said that NPAs are coming down. But, I would like to say that lots of funds are locked up in NPAs and there should be a slightly liberal approach towards one-time-settlement. I understand that there are some guidelines for one-time-settlement. But, I can say it with some experience that sometimes banks become more strict when people who have borrowed a few lakhs of rupees approach them with a proposal for one-time-settlement. The banks want to extract the maximum out of them and have even the last pound of flesh. I think this kind of approach towards one-time settlement is not in the interest either of the banks or the entrepreneurs or parties concerned. The banking system itself needs to be improved upon by reducing the NPAs and making use of the huge amount of money that is locked up and lying unused. I think the NPA system should be revisited, reviewed and made more liberal; also, the one-time-settlement system needs to be reviewed and made more liberal so that the banks could gain more funds from people who have not repaid the money. The NPAs could be reduced this way.

Sir, the other point that I would like to suggest relates to the credit deposit ratio. Banks talk about deposits and advances for a loan. But if a State-wise and district-wise study of the credit deposit ratio is made, you would find that there is an imbalance. There are some States where the credit deposit ratio is very high. (Contd. by 3d/hk)

HK/3d/3.30

PROF. P.J. KURIEN (CONTD.): There are some States where Credit Deposit Ratio is very high and there are some States where it is very low. Maybe in Bihar or in under-developed areas the Credit Deposit Ratio is very low. Banks should now make special efforts to lend money there. Then industries will come up and people there will be benefited. Banks should take liberal attitude in those areas. Even in my district or area, there are a lot of gulf remittances. So, every bank is there. In my village, there are 19 branches of nationalised banks and all of them are squeezing money and they are collecting deposits. But when we approach for loans, attitude of banks is very, very negative. So, this Credit Deposit Ratio should be studied State-wise and district-wise and the Government should do something to correct the imbalance in the Credit Deposit Ratio. It is needed for even development and correcting the regional imbalances with regard to industry and agriculture. Another point which I want to make, which has already been made by my friend on the other side, is regarding SSI sector. Even after this liberalisation and globalisation and all that, our SSI sector is contributing in a large way to employment generation and also for earning foreign exchange. Quite a good percentage of our export in industrial products is from the SSI sector. But when it comes to helping them, at least I know, adequate thrust is not given. SSI sector is India's special sector. If investment in medium and large industries generate certain amount of employment, SSI sector generates ten times more employment. It is only the SSI sector which can give some sort of improvement and impetus to our rural sector in rural areas. But adequate thrust is not given. I don't know whether banks have special policy to help the SSI sector, but I think, it is not there. Banks should devise a special policy and the SSI sector should be given loans at reduced rate. With regard to technological assistance and other assistance to the SSI sector, I don't want to say anything here. But, in any case, if the SSI sector is given the same treatment that we are giving today, it will not be in the interests of the nation. With regard to the agriculture credit, I would like to say that ordinary farmers, small and marginal farmers get loan at 7 per cent interest rate. But, Sir, I don't know to what extent it is available. According to statistics, it is available. But who can pay the 7 per cent interest rate? Why is the growth rate in agriculture 2 per cent? I think, it is less than 2 per cent. We should reduce the interest rate of agriculture loan, especially for small and marginal farmers, at least, to 4 per cent. At the ground level, they should get loan at 4 per cent. Where is the fund from? While the Finance Minister was replying on the Budget, so many hon. Members raised this issue that the interest rate for agriculture sector should be reduced. Then he was talking about economics and all that. But I read the other day that the State Bank of India made profit. Where is this profit from? All the banks are making huge profits. Where is this profit from? It is generated from their functioning -- by the loans taken by people. So, there are adequate funds in the banks itself to help these poor farmers to reduce the interest. No one needs budgetary support necessarily. There is no need of budgetary support. Without any budgetary support, they can reduce the interest rate for farmers, at least, for small and marginal farmers having five hectares of land or less to, at least, 4 per cent.

(Contd. by 3e/KSK)

KSK/3.35/3E

PROF. P.J. KURIEN (CONTD): That is not being done by the Government. Lot of concessions are given to other sectors. I am not criticising that. But, when it comes to agricultural sector, real economy is practised by the Finance Ministry. Let us practise economy in every sector, and not only in agricultural sector. So, I would request the hon. Finance Minister to consider this matter. At least, by next year, please, reduce the interest on agricultural credit to four per cent, so that the agricultural sector may also show a growth rate. Now, our economy's growth rate is above 8 per cent, but the growth rate of agricultural sector has declined to two per cent. That means, it is a totally imbalanced growth. Rural sector and villages are going backwards while certain other sectors, urban and industrial sector, are witnessing good growth. Therefore, I request the hon. Minister to please rectify this anomaly.

Then, I would like to mention about educational loans. I am speaking this from my personal experience because some people approached me in this regard. In Kerala, everyone -- he may be an agricultural worker or a tree-climber -- wants to send his children to school for education....(Interruptions). It is not a question of literacy, especially for girl child. In Kerala, no girl child is denied education. No parents will deny their girl child from going to school. In fact, they will encourage her to go to school and study. Also, there is no preference for boys there, and there is no female foeticide. In many places, number of girls is more as compared to boys. Every person, however poor he may be, whether he is downtrodden, Scheduled Caste, or, Scheduled Tribe, wants to educate his children. But, when they approached the bank for educational loan, the Bank Manager told them that how could he give loan if there was no surety. He told the student that his father was a tree-climber or an agricultural labourer. So, where is the income? So, he says that he could not give the loan. Once I myself telephoned and asked the manager, "What is this? The Finance Ministry says that loans are available and you are talking like this." Then he told me that there was personal risk. If he gives the loan without any surety, then, if that loan was not repaid, a personal risk was there. Therefore, the loan was not given. So, I would request the hon. Minister to make more liberal provisions with regard to education loan so that all meritorious students, irrespective of their income, can get loan. It should be done that way. I do not know whether there is any personal risk on the part of Bank Manager in giving the loan, but if it is there, that aspect should be reviewed. Why should they have any personal risk because they are just implementing the policy of the Government?

Another thing I would like to mention is about co-operative banks. I do not know whether the Government has received it or not; I have received a representation from some of the co-operative bank officers who met me a couple of months back. They asked me to represent their case before the Finance Minister with regard to the income-tax on the profit of co-operative banks. There are lot of representations in this regard, and I hope that they must have reached the Finance Ministry also. I do not know whether the Finance Ministry has responded to it favourably or not. If not, I believe that it is a reasonable demand because co-operative banks are not commercial banks where you make profit. Co-operative banks are ordinary people's banks where common people purchase shares and they become members. So, banks are owned by the common people. (continued by 3f - gsp)

AKG-GSP/3F/3.40

PROF. P.J. KURIEN (CONTD.): Actually, they are not commercial banks. They are not for business. Their name itself is service cooperative banks, or, urban service cooperative banks. So, it is for service. How can the income from them be taxed? How can income tax be imposed on their income? As a matter of principle, I object and oppose it. It should not be done. It is a wrong policy. It is a wrong message that you are sending. Therefore, I request the hon. Minister and appeal to him to remove the tax on the income of the cooperative banks, if it has not already been removed. This is also an indirect tax that is imposed on agriculturists and farmers. On principle, I oppose it. There are very few cooperative banks that make some good profits. In my District, there is a cooperative bank, namely, Thiruvalla East Cooperative Bank, an urban cooperative bank, perhaps one of the biggest cooperative banks in Kerala, which makes a profit of a few lakhs of rupees, and, on that profit, income tax is imposed. This is not good economics. This is bad economics. Therefore, please help the cooperative sector. Don't try to squeeze the cooperative sector.

With these suggestions, once again, I say that this is a good Bill and I support it. Thank you. (Ends)

ֳ ן־ָ (ָ Ϥ) : ֳ֯ן , ӿ֮ ׾֬ ֵ ֵ , ־֮֬ , ו֮ ׾ָ ֤ ֵ֟ ֵ ָ ָ , ִ֮ פ , פ ֣ ֣ ѕ ָ֬ , ѕ֟ ָ֬ ֮֜ ֵ֟ ֵ ѕ ִ ѕ ֟ ׻֋ ָ ֛, ֛, ִִ ָ ׸ֵ֟ ֛߅ ִ ִ ֲ ֯ע֮֕ ֟ և , ִ Ù ָ ػ , 54 ןֿ֟ ֙ 51 ןֿ֟ և ָ ־֮֬ ؙ և , ָ ػ , 100 ֜ 200 ןֿ֟ ֲֻ 10 ןֿ֟ ؙ և ֜ և ָ ֛, ָ ֛ ָ 껛 , ָ ָ , ןֵ ӓֻ֮ ֮ ϳ־ ßֻ ־֮֬ ָ , ָ ֵ , ߔ ־ , ߸-߸ ׮֕ ִ ָ ֮ ָ ׮֕ ־ֿ , ָ ׾ ßָ ָ ֮ ׾֤ ѕ ֟ ִ֟ ׾֬ ֮ ־ֿ ߅ ָ ֵ օ ָ ֲ֤ , ָ ֜ ָ ִ օ (3 ָ ֿ:)

3G/HMS-SK/3.45

ֳ ן־ָ (֟) : כו֙ 17 ֜ 34 ָ 774 ֵ, ֋ 959 ֵ ֱ 427 ֵօ ִ , ִ֟ ӿ֮ ߔ ־֮ Ӥ ָ ׮֕ ֋

֮־ָ, ֕ ֮֟ Ӥ -ֲֻ ׮֕ ־ԕ׮ ן ֤ ׾ , ֲ ֛ ֟ ׮֕ ָ , ִ ׾ ָ , ָ߲ ָ ׿ ָ social obligations ִו ֣״֋ , ָ ֲ ׾֤ ӕ ־ ָ ֜ , ֲ ־ã - ׮֕ ֵ , Independent Commission ו former Finance Secretary 00 ㌻ ֮ ׸ ׻ , ו - "There are concerns about the lack of social orientation, fragility of the banking system and issues of economic sovereignty and owndership."

, ָ ׮֕ , ָ ٣ ӯϳ ָ Ù ß ׮¯ϳ־ ֲ֤ß ָ ָ -־ã ָ ֛ ¯ϳ־ ϳ׾֟ ׻֋ ֕ ־ֿ ֟ ֮ ִ Ù ָ ׾ ߑ׻ ֻ ׻֋ ִ ן ׾֢ߵ ־ã , ֕ ו ָ ™ָ֓ ֜ ו ָ ־ã , ֟ ִ ֤ Ù ו֮֟ ֵ֤ ״ֻ֮ , ֮ ֵ֤ ״ֻ

, ֕ Ӥ ߲ 30 ָ ֋ ֣ ֮ ֲ֤ ߲ 5 ״׻ֵ֮ ו֮ ֈә , ָ ֌ֆ ָ ֟ ָ ֮ ߻-ֻ ֟ ־ ָ ֕ ֕ ֤ ָ , ָ þִ֣֮߮ , ֱ׸ ӲӬ ָ י ֱ׸ ֕ -- 4 ןֿ֟ ֋ , ֕ 45 ָ ֋ ־ֿ ֻ ֮ ֻ ָ ֵ ә ֟ ֕ 60 ןֿ֟ Ԯև ꌙ ״ֻ֮ ֻ ׾֢ߵ ׾֬ֆ ָ ™ߵ 40 ָ ֋, ֕ ָ ֲ֤ ֛ ֆ (3 /ߋ־ ָ ֿ:)

-HMS/PSV-YSR/3H/3.50

ֳ ן־ָ (֟): ׻֋ ֲ ֤ ֮֟ ߓ ֮ ׿ֿ , ֳ ִ־ ֲ ָ , ׾ֿ ָ Կá ָ ֮ , פ ֟ ָ ֮ FDIs FIIs , ׾֢ߵ ã֋ , ѕ , ׮ֲԬ ן ֮ ָ ׯ֙ , ֮ ָ ִ֮ ֱ ִ և ִ ֟ߕ ׮ֻ ־ ֻ ׾׾ֵֻ֪ ָ ֵ֙ , , the report says, "Rather it enhances the vulnerability of the financial system by encouraging risky investments, increasing exposure to global capital and putting pressure on the Government to liberalise exchange rates and capital flows." ׾֤ ...(ִֵ ә)... FDIs FIIs ֟ , ָ Ծ־ã ϳ׾֟ ֻ֟ פ ֮ ָ֟ ֟ ׻֋ ï™ ָ ֕ ָ ָָ ٣ ןֵ ӓֻ֮ ֻ ׮֕ ָ ֮ ٣ ׾ ֻ ֵ ײֻ ִִ ׾ֿ ֵ ֻ֟ פ ָ ִ֟ ֟Դ֮ ӿ֮ ׾֬ , ֻ ӿ-- ӿ Ù ֆ ׻֋ ׮֕ ֕ פ ֋ ָ֟ ֟ ָ ָ߲ , ׾ , ִ ׾ , ֯ ׻֋ ׾֬ ׾ָ - ֮־֤ (ִ֯)

SHRI TAPAN KUMAR SEN (WEST BENGAL): Sir, I rise to express my serious concern and apprehensions on some of the provisions of the proposed Bill, and I strongly record my opposition to at least one provision of the Amendment Bill in which I have already moved an amendment.

At the outset, I would like to be educated at least on one aspect of the present Act. Will the hon. Minister explain this? As per the present Act whether the Government is empowered to dilute the State Bank of India equity in the subsidiary banks below 51 per cent. Just assume that this Bill is not in place. As per the present dispensation, whether the Government is empowered to dilute its share below 51 per cent. And can it be reduced to only 33 per cent? If that be so, then the present Amendment Bill definitely improves the position by putting a cap of 51 per cent on the SBI equity in its subsidiary banks. But if that is not, and I understand that is the position, then by this Amendment Bill, the Government is deciding or enabling itself to further dilute the SBI or the Government holding in the subsidiary banks and initiating a process of divestment. I am opposed to such dilution of Government equity or SBI equity, and in the instant case, in the subsidiary banks of State Bank of India. For that matter, I oppose such dilution of Government equity in all public sector units in the country. I insist on the hon. Minister to accept my proposed amendment in the Bill. Sir, the present Bill is aimed at making the State Bank of India and its subsidiaries Basel II norm compliant. (Contd. by VKK/3J)

-YSR/VKK/3j/3.55

SHRI TAPAN KUMAR SEN (CONTD.): Now, here, I have heard the agonies and anxieties expressed over the regular decline in the priority sector lending, agricultural lending and so on and so forth. It was also pointed out that some Rs.2,00,000 crore reserve is piling up in the banks, but, still agriculture, small-scale industries, tiny sectors, etc. are not getting loans and whenever they are getting loans, they are getting loans at a higher rate of interest. But, at the same time, we are talking about Basel-II norms also. My only submission is, please lament either way. On both these issues, you can't lament. We welcome the Basel-II norms in Indian banking and, at the same time, lament on the fact that our agriculture is not getting enough assistance. These two things cannot go together. You have to lament either way. Why Basel-II? Initially, the Basel-I norm came and then Basel-II came in 2004. It provokes the banking system to shy away from lending to those sectors which give you less returns and which entails more risk, that is, there may be a failure or default. If there is crop failure, agricultural loans go to risk. So, simultaneously, the whole norm from Basel-I to Basel-II and onwards is tightening the grip of the parameter to provoke the entire banking and the financial systems to shy away from the direct and priority lending. Well, that norm may be good in highly advanced and industrial countries where the social balance is altogether different. But in a developing country like ours, I think, that norm is doing a disservice than service because in our country when you see the banking system, it is not just an institution for commercial lending, it is expected to do something more and precisely with that kind of perception, it was nationalised in 1970. With that kind of sense of priority, it was nationalised in 1970 and that the bank, beyond becoming a commercial lender, should also be an instrument of all-round growth -- and mind it, the growth in a horizontal expansion of the economy -- embracing the agricultural sector, embracing the small and tiny sector where the majority of our population survives. So, again, I repeat, you cannot lament on both the issues. You have to choose only one. In that event, I insist that the figure of priority sector lending was very low prior to nationalisation, came up to 18 per cent post-nationalisation, but again started dipping when we started adapting a new growth economic policy trajectory after 1990 and particularly in the agricultural and rural sectors, in real terms, we are yet to come out of that declining trend although we are making all the efforts. But even the number of accounts has gone down by the end of 2004. Thereafter, on some focussed initiatives, it has increased, to some extent, but the overall trend is a trend of shying away from the priority sector, agricultural sector, small-scale and tiny sectors. And I think, this is closely linked to the blind pursuit of Basel norms in assigning risk weights to the particular lending, to the particular section of borrowers, and accordingly, the defined capital adequacy in respect of lendings and borrowings of different rates. To the un-rated and under-rated borrowers, your risk is high. You have to apportion a bigger amount of capital separately in the name of good financial health of the whole banking system. We require a good health. At the same time, we require a healthy man to serve the society, in general. So, in that event, I insist that there is room for lot of improvement instead of blindly pursuing Basel system. (Contd. by 3k)

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