Date:11/06/2004 URL: http://www.thehindubusinessline.com/2004/06/11/stories/2004061102420400.htm

Back Plan to strengthen banking sector — 2nd action report to stock scam tabled in House

Our Bureau

New Delhi , June 10

IN its second progress report on the action taken on the 2001 stock market scam, the Government has said that it proposes to introduce Bills to amend the Banking Regulation Act and Securities Contract Regulation Act (SCRA) by incorporating fresh amendments.

The amendments would ensure demutualisation and corporatisation of stock exchanges and strengthen regulation of the banking sector, especially that of urban co-operative banks.

The Bills introduced in Parliament earlier have lapsed and hence have to be introduced afresh after incorporating changes to make the amendments more effective, an official release said.

Further, the release said, the Government is considering other legislations like the Companies Law (Amendment) Bill and Government Securities Bill.

The second progress report, pursuant to the recommendations of the Joint Parliamentary Committee (JPC) on the stock market scam, was tabled in Parliament on Thursday.

The progress report confirms action taken on 36 recommendations. With this, the number of pending recommendations on which action remains to be taken is 90.

The JPC probing the securities scam had submitted its report to Parliament on December 19, 2002. The report contained 276 observations, conclusions and recommendations.

The committee had recommended that the Government should present its Action Taken Report (ATR) to Parliament within six months and thereafter, periodic progress reports every six months till action on all the recommendations has been fully completed to the satisfaction of Parliament.

The Government had submitted the ATR to Parliament on May 9, 2003.

The first progress report was presented in the Lok Sabha and the Rajya Sabha on December 12, 2003 and December 16, 2003 respectively.

In the ATR presented to Parliament during May 2003, action on 111 recommendations was completed.

In the report presented during December 2003, action was completed on 39 additional recommendations, bringing down the number of pending recommendations to 126.

The release also said that the Government would endeavour to address each of the JPC's recommendations and suggestions in right earnest.

"Effective action will be taken against those who are found guilty. The Government will ensure that the remaining recommendations of the JPC are most expeditiously acted upon."