Madam, I rise to commend to the House for consideration the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Bill, 1988. The various Banking Laws were last amended in 1985. Since then, in the administration of these laws, a need for some further amendments has been experienced. This Bill that is before the House seeks to meet only these limited felt needs. We are aware that there has occurred a sea change in the banking scene since the day our late Prime Minister, Shrimati Indira Gandhi, took the momentous decision to bring commercial banking in the fold of the public sector. There is a need to take stock of these developments, assess our perspective requirements and redraw our strategies for future growth. A comprehensive Bill on banking may become necessary to achieve our objectives. However, such a Bill, if considered necessary, would be taken up later. The present Bill does not seek to achieve any major changes in the banks’ operations. The Statement of Objects and Reasons appended to the Bill sets out the rationale for various provisions of the Bill. I would, therefore, dwell only very briefly on some of the more important provisions. Madam, we have been strengthening the capital base of our nationalised banks during the last three years so that their debt equity ratios reach a level which is internationally acceptable. At present, paid-up capital of the nationalised banks is subject to a ceiling of Rs. 100 crores. With successive contributions, this ceiling has been reached in the case of some of the banks. On the other hand, with ever expanding deposit base, the need for enlarging their capital base persists. It is therefore proposed to revise the ceiling to Rs. 500 crores. The Bill also seeks to provide for uniformity in the tenure of all non official directors and employees directors on the Boards of State Bank Group of banks and financial institutions and to limit their continuous membership on the Boards of Directors in keeping with the principles enunciated by the Estimates Committee. The same principles would apply to the Boards of Nationalised Banks, provisions for which would be incorporated in the Nationalised Banks Management and Miscellaneous Provisions Schemes, The Direct Tax Laws (Amendment) Act, 1987, provide for financial year as the uniform previous accounting year for all the assesses. Since public sector banks are also subject to tax laws, they would have to submit their profit and loss accounts in future with reference to financial years. Since banks at present have calendar years as their accounting years, the change would have necessitated closure of books by the banks as at the close of business on December 31 and March 31 every year. To obviate this avoidable exercise which is costly, it is proposed to change the present accounting year of the banks and financial institutions also to coincide with the financial year. This Bill proposes to give the requisite power to the Government to notify the accounting year of the banks. Hon. Members are aware that there have been presistent and widespread demands from various trade and industry associations to make bouncing of cheques a penal offence. In this Bill, it is proposed to amend the Negotiable Instruments Act to provide for this. The provision aims at improving acceptability of cheques in settlement of liabilities. Hon. Members would agree that this is a desirable objective. The provision seeks to make bouncing of cheques for want of sufficient funds a penal offence. It does not deliberately go into the question of intentions of the drawers, as no prosecutions are permitted without the drawer getting a notice of dishonour and 15 days time to make good the amount of the cheque. Thus, it is presumed retrospectively once the drawer does not pay even after getting notice and time for payment. Such laws exist in almost all the major countries of the world. The provision provides enough safeguards to avoid harassment to honest account holders. The Bill also seeks to provide for authority to the Reserve Bank of India to direct special audits of banks for specified periods or for specific transactions. This enhances the Investigative authority of the central bank of the country. It is also proposed to provide for making of the regulations by the Board of Directors of certain banks and financial institutions by notification in the Official Gazette as recommended by the Committee on Subordinate Legislation. There are various other amendments which are proposed to obviate certain practical difficulties encountered in operating the present provisions of the various laws and are mainly of routine nature. I am aware that expectations from our banks have been increasing and there has been a general feeling that the banks have not been able to keep pace with popular demands. During the recent past, concerted efforts have been devoted to bring about an all round improvement in the operations of the banks. Improvement in customer service has received specific attention. Submit