Financial Sector Reforms strengthened regulatory Mechanism of Securities Market

NPAs OF PUBLIC SECTOR BANKS DECLINED 

A number of reforms undertaken by the UPA Government in the last four years has deepened and widened Securities Market and strengthened the regulatory mechanisms for these markets. Highlighting the various initiatives taken by the Government, the Finance Minister, Shri Pranab Mukherjee, in his Interim Budget Speech for the year 2009-2010 in the Lok Sabha today said that systems and practices have been put in place to promote a safe, transparent and efficient market to protect market integrity. 

Shri Mukherjee said that the comprehensive revision of the Companies Act 1956 undertaken by the Government to make it a compact law in response to the changes in the business environment, would enable adoption of internationally accepted best practices. Based on this exercise, the Companies Bill 2008 has been introduced in the Parliament. 

Referring to the technological, institutional and legal reforms in the financial sector undertaken by the Government, Shri Mukherjee said that these have resulted in significant improvement in the financial health of the Public Sector Banks. The Non-Performing Assets (NPAs) have declined considerably from 7.8 per cent on March 31, 2004 to 2.3 per cent on March 31, 2008. 

In the case of Regional Rural Banks (RRBs), a process of amalgamation and recapitalisation of RRBs with a negative net worth has been initiated, with the result, 196 RRBs have been merged into 85 RRBs. The Government has contributed Rs. 652 crore for the capitalization of RRBs upto December 31, 2008, Shri Mukherjee added.