Parliament passes NABARD (Amendment) Bill, 2017

Parliament has passed the National Bank for Agriculture and Rural Development (Amendment) Bill, 2017 with the approval of Rajya Sabha. Lok Sabha already had passed the bill in August 2017.
The Bill seeks to amend National Bank for Agriculture and Rural Development (NABARD) Act, 1981. The Act establishes NABARD for providing and regulating facilities like credit for agricultural and industrial development in the rural areas.

Key Features of the Bill

The Bill allows Union Government to increase capital of NABARD from Rs. 5000 crore to Rs 30,000 crore. Further, it allows Union Government to increase the capital more than Rs 30,000 crore in consultation with the Reserve Bank of India (RBI), if necessary.
The Bill provides that Union 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 Union Government. Currently RBI holds 0.4% of paid-up capital of NABARD and remaining 99.6% is held by Union government and this causes conflict in RBI’s role as banking regulator and shareholder in NABARD.
The Bill replaces terms ‘small-scale industry’ and ‘industry in tiny and decentralised sector’ with terms ‘micro enterprise’, ‘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.
The Bill substitutes references to provisions of the Companies Act, 1956 with references to the Companies Act, 2013. It includes provisions dealing with definition of a government company and qualifications of auditors.

Month: Current Affairs - January, 2018