SHRI P. CHIDAMBARAM: I do not know. I am willing to remain here till 2.00 o'clock in the morning, as I did it today. The point is, the gentleman who was in the Chair said that after Mr. Rawat, there is one more speaker.
SHRI P. CHIDAMBARAM: Mr. Ram Naik said that Mr. Mishra may be given one minute. I said, if he is the last speaker, he may be given one minute. How does he become not the last speaker?
... (Interruptions)
JUSTICE GUMAN MAL LODHA (PALI): Let it be debated.... (Interruptions)
SHRI P. CHIDAMBARAM: If you want to stop this Bill, Mr. Lodha, we can debate it for the rest of the day. The point is, Mr. Ram Naik said, allow Mr. Mishra to speak for one more minute. Do not try to turn the table now.... (Interruptions)
SHRI RAM NAIK (MUMBAI NORTH): There should not be any misunderstanding. ...(Interruptions) From my side, I thought he was the last speaker. So, I said he was the last speaker. I was not aware that ...(Interruptions)
SHRI P. CHIDAMBARAM: When Shri Sontosh Mohan Dev asked, the Chair announced that there was only one more speaker.
... (Interruptions)
SHRI P. CHIDAMBARAM: If this is to filibuster, let it be filibustered.
PROF. P.J. KURIEN (MAVELIKARA): Mr. Deputy-Speaker, Sir, I can understand the anxiety of the Government to pass the Bill but I do not understand why the Finance Minister is objecting to a detailed discussion. Let there be a detailed discussion.
SHRI P. CHIDAMBARAM: I have to reply on the Budget also.
PROF. P.J. KURIEN (MAVELIKARA): That is again something which I cannot understand. The Finance Minister could have replied to the Budget discussion and we could have passed the Budget. What was the urgency that this Bill was taken up before passing the Budget. ...(Interruptions)
THE MINISTER OF PARLIAMENTARY AFFAIRS AND MINISTER OF TOURISM (SHRI SRIKANT JENA): I submit that after the Bill is passed here it has to go to Rajya Sabha immediately because tomorrow is the last day of this phase of the Session and tomorrow is Friday. That is why we are in a hurry. That is the only reason for the urgency. ...(Interruptions)
SHRI P.CHIDAMBARAM: The Chair said that there was one more speaker. I have no objection. Let them speak. It is quite obvious that Shri Lodha and a few others want to filibuster. Let them speak. I am willing to listen.
SHRI VIREDNRA KUMAR SINGH (AURANGABAD):
SHRI P. CHIDAMBARAM: We are not discussing it now.
SHRI A.C. JOS (IDUKKI): Maybe the Finance Minister should be a little more tolerant. What is the urgency of the promulgation of the Ordinance? That is not the position now. The Ordinance has already been promulgated and it is before us. So, instead of sending it to the Standing Committee if the Finance Minister is so insistent that ...(Interruptions)
SHRI MULLAPPALLY RAMACHANDRAN (CANNANOR) This particular point was discussed here.
SHRI A.C. JOS (IDUKKI): Yes, I do not want to discuss that now. My submission is, a slightly more detailed discussion is necessary. Is the Finance Minister adopting our suggestions. He can at least accept the suggestions coming out the discussion as official amendments.
MR. DEPUTY-SPEAKER: If one speaker is allowed, others will also have to be allowed. Otherwise, I will ask the Finance Minister to speak.
SHRI M.P. VEERENDRA KUMAR (THE MINISTER OF STATE IN THE MINISTRY OF FINANCE): Yesterday we discussed it for two hours. ...(Interruptions) I accepted the amendments also.
SHRI A.C. JOS (IDUKKI): My humble submission to the Finance Minister is -- I do not know why he becomes so intolerant -- we are not here to defeat the Bill. We are not filibustering. We are only saying that this affects the rural population in a very big way. It is a very good measure. I very patiently and carefully heard Shri Sanat Mehta's speech. It is all right that the upper crust of the society accepting deposits and cheating the depositors is there. No doubt about it. We need a discipline for deposit-making also. In that respect I congratulate the Minister for bringing some discipline into the financial aspect of accepting deposits.
But the point is that a poor man needs Rs.300 or Rs.500, not Rs.5000 or Rs.10,000. If one of my sons or relatives fall ill, I will have to rush to somebody to get Rs.300 or Rs.400. The rate of interest may be high. Immediately, I take my ring or for that matter anything to the pawnbroker to get the money. The only thing is that you are allowed to lend the money, but not others' money.
I agree with you. We need the expansion of the term `relatives'. Here it is succinctly explained. I do not want to quote the Section. The degree of relation can be expanded so that more money, more people can be brought into the net. The amount of capital, that is, Rs. 20 lakh or Rs.50 lakh, needed for starting the company can also be reduced to the maximum. That is all we can submit in this regard. We have so many things to say.
India is a country where 80 per cent or 90 per cent of the population live in the rural areas. If you are in need of some money, banks have not become a habit till today. It will take some more years for the rural people to go to the banks. Banks also have got a lot of limitations and procedures. That is why, we are clamouring; that is why, we are asking that some more thinking is necessary in this matter aand some more liberalisation is necessary in this matter. It is not because we are, in principle, against it. My submission is that the hon. Finance Minister may kindly note that we are not against disciplining it. We are not against bringing some discipline in the financial sector. A sudden embargo, a sudden deterrent on the economy of the rural India will create more problems.
It is a pity that in our State it is a habit. You cannot deny it. Our moneylending is disciplined and they are doing it very well. (Interruptions)
SHRI MULLAPPALLY RAMACHANDRAN (CANNANOR) How many chit fund companies are thriving in Kerala?
SHRI A.C. JOS (IDUKKI): Exceptions prove the rules, Shri Ramachandran.
I am not against it. Some more distinct laws will have to be considered in this matter.
Let the Finance Minister reply.
THE MINISTER OF FINANCE AND MINISTER OF COMPANY AFFAIRS (SHRI P. CHIDAMBARAM): Mr. Deputy-Speaker, Sir.. ... (Interruptions)
PROF. P.J. KURIEN (MAVELIKARA): Sir, ... (Interruptions)
SHRI P. CHIDAMBARAM: Do not make a speech, please ask the question.
MR. DEPUTY-SPEAKER: Then, I will have to allow others also.
SHRI P. CHIDAMBARAM: He is only asking the question. You put the question.
MR. DEPUTY-SPEAKER: Then, Prof. Kurien, you may also ask the question.
PROF. P.J. KURIEN (MAVELIKARA): The hon. Finance Minister has conceded that there is a need for an indigenous bank.
SHRI P. CHIDAMABARAM: What is your question?
PROF. P.J. KURIEN (MAVELIKARA): I am asking the question.
He has conceded that and he has also conceded the fact that the commercial banks are advanced to the extent of advancing money to the needy. That has been explained. How are you going to bridge this gap?
... (´ªÉ´ÉvÉÉxÉ)
Secondly, there are some fraudulent companies in Tamil Nadu so also in other places. Because of that, should we stifle even the honest companies? I want a specific answer to this question. ... (Interruptions)
SHRI CHAMAN LAL GUPTA (UDHAMPUR):
SHRI P. CHIDAMBARAM: It is not a question, Sir. He is making a speech ... (Interruptions)
SHRI CHAMAN LAL GUPTA (UDHAMPUR):
... (´ªÉ´ÉvÉÉxÉ)
SHRI GIRDHARI LAL BHARGAVA (JAIPUR):
SHRI BANWARI LAL PUROHIT (NAGPUR):
SHRI P. CHIDAMBARAM: I have already explained this.
SHRI BANWARI LAL PUROHIT (NAGPUR):
SHRI GIRDHARI LAL BHARGAVA (JAIPUR):
MR. DEPUTY-SPEAKER : Now, the hon. Finance Minister, please.
... (Interruptions)
SHRI P. CHIDAMBARAM: Sir, he has already spoken... (Interruptions) I am not yielding. I am not listening to what the hon. Member is saying... (Interruptions)
SHRI GIRDHARI LAL BHARGAVA (JAIPUR):
SHRI GIRDHARI LAL BHARGAVA (JAIPUR):
SHRI GIRDHARI LAL BHARGAVA (JAIPUR):
1758 hrs.
THE MINISTER OF FINANCE AND MINISTER OF COMPANY AFFAIRS (SHRI P. CHIDAMBARAM): Mr. Deputy-Speaker, Sir, I have spent several hours in this House today as well as yesterday discussing with individual Members who have expressed apprehensions. I have met delegations and in fact, I met, if I remember right, Mr. Bhargava, Mr. Rawat and Mr. Mahajan's delegations and I explained it to them. The gentleman who spoke on behalf of the traders, I am glad that at least, he candidly admitted that he was speaking on behalf of the traders. I met his delegation also.
I am not criticising. I met his delegation and I have already explained. This unnecessary apprehension and I must say with some regret that part of the apprehension is created because we do not spend enough time reading either the Ordinances or the Bills and we do not spend enough time explaining it to the people. For example, the question which Mr. Purohit raised now, I have already answered that.
SHRI BANWARI LAL PUROHIT (NAGPUR): I was not here.
SHRI P. CHIDAMBARAM: You were not here, that is the problem. I already answered when it was raised, when I moved the Bill.
Let me make it very clear, the Reserve Bank of India Act already has Chapter 3B and Chapter 3C. Chapter 3B of the Reserve Bank of India Act is titled `Provisions relating to Non-banking Institutions, receiving deposits and Financial Institutions'.
In that Chapter, all that we are doing is, we are saying, `NBFCs must follow prudential norms'.
That means, you must have a certain capital, you must have certain reserves, you must file certain returns and you must follow the guidelines laid down by the Reserve Bank which are not as strict as for banks but soemwhat stricter than what the guidelines are. Nobody can have any complaint about that. Chapter 3B is already there. It deals with non-banking financial institutions. All that we are doing is laying down capital adequacy norms. What we said was `Rs.50 lakh'. But in response to many suggestions, I have reduced it to Rs.25 lakh. A company which is already in existence today with less than Rs.25 lakh capital, we said, `you must now rise to the new capital limit within three years'. Earlier, you must provide the new capital within three years, that is, Rs.50 lakh. Now because I am reducing that to Rs.25 lakh, you must bring the new capital within three years. But another three years is given at the discretion of the Reserve Bank. In fact, Shri Nirmal Kanti Chatterjee asked, `why are we giving three plus three'? The answer is that it is already a company. It is already doing NBFC business. It has low capital. It has to come up to the new capital within three years but if the Reserve Bank thinks that it is an exceptional case, it may consider giving it one year or one-and-a-half years or three years. The maximum is three years. Nobody can have any complaint about Chapter 3B.
None of you is really talking about Chapter 3B. But unfortunately, you are mixing Chapter 3B with Chapter 3C. Chapter 3B is a provision which has been there for long. It was inserted in 1963. We are only tightening the norms. Just as in banks, we had introduced basil norms, we are tightening the norms on provisioning reserves and capital adequacy. We are tightening the norms under Chapter 3B. Nobody can have any serious complaint. Let us put aside Chapter 3B. Virtually, the whole of the amending Act, except 45(SS), is taken care of. So, you cannot have any complaint about the amending Act.
Now, we come to Chapter 3C. Now Chapter 3C is titled `Prohibition of acceptance of deposits by unincorporated bodies'. It has only got Sections 45R, 45S and 45T. It only has three sections. Some one said that this Chapter is unconstitutional. I am sorry to disappoint him. This Chapter was challenged in the Supreme Court and the Supreme Court has upheld the constitutionality of this Chapter. So, the Supreme Court has said that Parliament has the power to make the law dealing with acceptance of deposits by unincorporated bodies. Parliament has the power even to prohibit acceptance of deposits by unincorporated bodies. What is an unincorporated body? A company, a corporation, a cooperative society, a nidhi, and a Chit Fund are all incorporated bodies. All others are unincorporated bodies. Individual, partnership, association of individuals and even HUF are all unincorporated bodies. What is the distinction in law between an incorporated body and an unincorporated body? An incorporated body has a succession and it can sue and be sued. An unincorporated body cannot sue and be sued except by the names of the persons composing it. This is the well-known definition in law. It has been there for centuries. I am not creating such a definition. When we say in Chapter 3C we had three provisions. Now, what are the existing provisions?