Rajya Sabha passes NABARD (Amendment) Bill, 2017; Read here for more details

NewsBharati    03-Jan-2018
Total Views | 1

New Delhi, January 3: Rajya Sabha on Tuesday taking a step forward has passed the National Bank for Agriculture and Rural Development (Amendment) Bill, 2017. Notably, the bill allows the central government to increase authorized capital of NABARD by six times to Rs 30,000 crore from Rs 500 crore and enable exit of Reserve Bank of India (RBI).

 

The NABARD bill was passed by voice vote in the Rajya Sabha. The bill provides that central government alone must hold at least 51% capital share of NABARD. Further, it transfers share capital held by RBI valued at Rs. 20 crore to the central government. Currently, RBI holds 0.4% of paid-up capital of NABARD and remaining 99.6% is held by central government and this causes conflict in RBI’s role as a banking regulator and shareholder in NABARD.

The NABARD bill also replaces terms including small-scale industry and industry in a tiny and decentralized sector with terms microenterprise, small enterprise and medium enterprise as defined in MSME Development Act, 2006. Further, it allows NABARD to provide financial assistance to banks if they provide loans to the MSMEs.

However, the bill also substitutes references to provisions of the Companies Act, 1956 with references to the Companies Act, 2013. It includes provisions dealing with the definition of a government company and qualifications of auditors. Importantly, The NABARD bill was passed by the Lok Sabha in August 2017.