Financial Daily from THE HINDU group of publications
Thursday, May 09, 2002
Financial Daily from THE HINDU group of publications Thursday, May 09, 2002 |
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Money & Banking
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Public Sector Banks Listed PSBs want norms aligned with Cos Act Rajalakshmi Menon
MUMBAI, May 8 PUBLLIC sector banks which are listed on stock exchanges are seeking changes in the general regulations under the Bank Nationalisation Act in order to align them with the recent changes in the Companies Act. According to bankers, these changes are expected to address some long-standing issues that several listed banks had been seeking. For eg: location for convening the annual general meetings and extraordinary general meetings and issue of preference share capital and sweat equity. A committee of bankers will submit a report to the RBI which will in turn forward its recommendations to the Government. Said a senior bank official: "At times it is inconvenient to hold our AGMs or EGMs only at places that we are registered at. After the proposed amendment, we can hold our AGM at any location in the country.'' He added that the present structure for issuing of capital was ambiguous and banks would feel more comfortable with a provision in the Act delineating how capital could be issued. Bankers said that with these changes in place there would be far more clarity in the functioning of nationalised banks and several operational aspects would be made simpler. According to bankers, through the amendment of the Companies Act 2000, certain provisions had been introduced which had not been correspondingly included in provisions applicable for nationalised banks. These provisions have to be synchronised and brought into the present regulation, one banker said. Other issues such as payment of interim dividend, keeping the shareholders' register in the head office, the right of nomination of shareholders and postal ballot for voting, which have not been clarified under the Bank Nationalisation Act, will be included as provisions. Bank officials said that there was no provision for powers that can be assigned to the board of directors such as constitution of the board, meetings of the board, conducting proceedings and powers to the board to raise debt by bonds, debt and other securities. Said a bank official, "Though banks employ their own procedures in each of the cases, a provision for all these issues will help banks to formulate their course.''
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