Union Cabinet approves Companies (Second Amendment) Bill 2019

Union Cabinet today approved Companies (Second Amendment) Bill 2019. The bill seeks to amend the Companies Act, 2013. The approval was given at a Cabinet meeting that was chaired by Prime Minister Narendra Modi.

The Bill would remove criminality under the Act in case of defaults which can be determined objectively and which, otherwise, lack the element of fraud or do not involve larger public interest. This would also lead to further de-clogging of the criminal justice system in the country. The Bill would also further ease of living for law-abiding corporates.

Briefing media, Finance Minister Nirmala Sitharaman said, the priority is to remove criminality under the Act and the Bill will further ease of living for law-abiding corporates. She said, 72 changes brought in the Bill will lead to further de-clogging of the criminal justice system in the country. The Minister said re-categorisation of 23 offences out of 66 compoundable offences of the Act have been done in the new Bill. Besides, seven compoundable offences would be omitted.

Earlier, the Companies (Amendment) Act, 2015 amended certain provisions of the Act to remove difficulties faced in the implementation of various provisions of the Act.

The finance minister also said the bill amends certain provisions of the act to remove difficulties faced in the implementation of various provisions of the Act. It also removes the imprisonment angle and reduces the punishment proposed under the Act. The quantum of penalty will also be reduced.

Besides, the Cabinet also approved mega consolidation of ten Public Sector Banks into four with effect from April 1, 2020. As per the plan, Oriental Bank and United Bank of India will be merged into Punjab National Bank. Similarly, Indian Bank will be merged with Allahabad Bank. On the other hand, Andhra Bank and Corporation Bank will be merged into Union Bank of India and Syndicate Bank will be merged into Canara Bank.

She said amalgamation will enable the creation of digitally-driven consolidated banks with global heft and business synergies. The Minister said the amalgamation will not affect the core banking system. She said Government aims to transform the Public Sector Bank landscape with the consolidation of ten Public Sector Banks into four.

Among others, the Cabinet has approved allowing Non-Residents Indians (NRIs) to own up to 100 per cent stake in disinvestment-bound Air India.