June 22: The meeting of Legislature-Parliament on Tuesday, June 20 has decided to send back the BAFIA bill to Finance Committee for review. The decision has arrived amid a huge criticism on inserting mechanisms that fulfil self-interest of MPs who are also bank directors.  Stakeholders had criticised the bill due to possible havoc that might be created in banking sector if the bill gets endorsed at present form. According to the stakeholders, if the bill gets endorsed as it is, small investors will suffer and big investors will dominate the market. They had also expressed their concern on long-term tenure of chairman and directors as well, as there is potential risk of manipulation, if the same individual reigns in the post for the long period. The preliminary draft of the bill had set two years tenure for the Chairman and Director of the bank fore-sighting the risks.

However, Sub-Committee formed under Chairmanship of MP Deepak Kuinkel submitted a report recommending removal of the provision to Finance Committee. The Finance Committee has passed the bill including the recommendation of the Sub-Committee.

The bill has been criticised for including provision where individuals who were taken action for acting against business discipline can also become directors of BFIs. Similarly, it also includes provisions of eternal appointment of bank directors and Chairman and has increased the tenure of CEO from 4 years to 5 years.

Likewise, the Sub-Committee has also recommended of removing a provision that bars individual from having any top position in the BFIs who owns above 50 percent ownership in any firm or company operating business taking loan from any BFIs. But now, a path has been opened for the committee to submit the bill with required modifications after re-discussion.