RS approves bill to give more powers to RBI

New Delhi, May 18 (UNI) The RBI Amendment Bill 2005 was passed by the Rajya Sabha today, a day after the Lok Sabha gave its approval for the initiative to empower the country's apex bank for managing the financial sector.

Minister of state for finance Pawan Kumar Bansal said the new law will remove ambiguity in legal validity to cover over-the-counter derivative tradings.

Replying to a debate on the bill, he said the move is not meant to cover all aspects of economic activity in the country. He said the government has taken determined measures to check scams in initial public offerings (IPOs).

During the debate, Congress leader Abhishek Singhvi said the bill will provide the Reserve Bank of India (RBI) with more powers as a regulator. It will let the RBI decide on repo rate and CRR which is in conformity with global paradigm.

The bill introduced last year had gone through close scrutiny at the parliamentary standing committee.

Mr C. Ramachandriah of the Telegu Desam party said more funds will now be available with the banks. But capital markets are undergoing major changes. Unless fundamentals of the economy are strong, sensex going up is meaningless, he said.

Mr Ramachandriah said abnormal volatility in sensex should be checked.

Others who participated in the debate were Mr Ramdas Agarwal of the BJP, Mr Janardhana Poojary of the Congress, Mr P.G. Narayanan of the AIADMK and Mr Moinul Hassan Ahamed of the CPI(M).

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