The National Council initiated debate on the Financial Service Bill 2010 and will continue to discuss tomorrow.
A recommendation that the Economic Affairs Committee (lead committee on the bill) proposed under the ownership clauses to allow 100% by the Government, either directly or indirectly, in Financial Institutions. I had written about my view point and about divestment of the Bank of Bhutan earlier. I am satisfied with the proposal.
A proposal I however do not feel comfortable with are sections 23 and 36
If the Authority has neither denied nor approved an application referred to in section 22 within six months of the date of application shall be deemed to be approved
This clause leaves a greater degree of room for manipulation and a lot of unanswered questions may stay in terms of proper processing of healthy and robust licensing procedure.
No licensee, or controller of a licensee, shall appoint a person as a director or chief executive officer except in accordance with this Act and shall notify the Authority who shall have the right to annul any appointments not in accordance with this Act.
as opposed to proposal by the committee:
No licensee, or controller of a licensee, shall appoint a person as a director or chief executive officer except in accordance with prevailing laws and shall thereafter notify the Authority.
For good monitoring to flourish it becomes critically important that the monitoring agency has an authority and power, well within the means of law. It makes sense to allow RMA to annul such appointment violating provisions of law which is reasonable and very important given the crucial nature of their role in sustaining a healthy financial market.
In a new section preceding section 51 I had proposed that all new FIs to float 35% shares to the public at the first IPO which received support and I hope the support will remain to be there during the last debate as well. Looking forward to tomorrow’s debate.