UPA wins trust vote: Good times for banks ahead?

By Latha Venkatesh, CNBC-TV18

The Finance Minister P Chidambaram has said that many pending bills need to be cleared. There are nearly 72 bills which are currently pending before the Parliament. But the most significant one from the markets perspective is the Banking Bill.

The likely bank reforms could be the Banking Regulation Act, SBI Amendment Act and the Pension Reforms Bill. The Congress has backed these bills repeatedly but the Left was the only stumbling block.

The Banking Regulation Act it will equate the voting right to stake. Congress will remove the law that caps voting rights at 10% for any entity. However, the Left parties opposed this Bill.

On the Pension reforms, the BJP has gone on record that it will support the Bill. Now it likely can be passed with SP-Congress-BJP support.

The SBI Amendment Act will bring down the government stake in SBI to 51% from the current 55%. It will help SBI in raising equity. The government was likely to divest and reduce the deficit. However, the Left blocked this process again.