The government is also likely to amend the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 to enable the National Pension System Trust (NPS) to be separated from PFRDA to ensure universal pension coverage.
The government may introduce two major financial sector bills, including a proposed law to facilitate privatization of public sector banks, announced by the finance minister in the budget.
The government is also likely to amend the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 to enable the National Pension System Trust (NPS) to be separated from PFRDA to ensure universal pension coverage.
Sources said the government is likely to introduce amendments to the Banking Regulation Act, 1949 during the upcoming winter session of Parliament.
In addition, privatization of banks would require amendments to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
He said that these Acts led to nationalization of banks in two phases and for privatization of banks the provisions of these laws had to be changed.
The one-month winter session of Parliament is expected to begin by the end of next month. The second batch of demands for grants allowing the government to incur additional expenditure in addition to the finance bill will also be put up for approval.
Finance Minister Nirmala Sitharaman, while presenting the budget for 2021-22, announced the privatization of public sector banks (PSBs) as part of the disinvestment drive to raise Rs 1.75 lakh crore.
“Apart from IDBI Bank, we propose to privatize two public sector banks and one general insurance company in the year 2021-22,” she had said.
To ensure privatization of a general insurance company, the government has already got Parliament’s nod for the General Insurance Business (Nationalisation) Amendment Bill, 2021 in the monsoon session that ended in August 2021.
Sources said that with the amendment in the PFRDA Act, the powers, functions and duties of an NPS trust, which are currently prescribed under the PFRDA (National Pension System Trust) Regulations 2015, may come under a charitable trust or the Companies Act.
The intention behind this is to keep the NPS Trust separate from the pension regulator and managed by a competent board of 15 members. Most of the members are likely to be from the government as they, including the states, are the largest contributors to the corpus.
The trust was set up by PFRDA to look after the assets and funds under NPS. A proposal to separate the two job roles has been under consideration for the past few years.
PFRDA was established to promote and ensure orderly development of the pension sector with substantial powers over the pension fund, central record keeping agency and other intermediaries. It also protects the interests of the members.
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