Section 31A of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
1[31A. Power to exempt a class or classes of banks or financial institutions.--(1)The Central Government may, by notification in the public interest, direct that any of the provisions of this Act,--
- (a)shall not apply to such class or classes of banks or financial institutions; or
- (b)shall apply to the class or classes of banks or financial institutions with such exceptions, modifications and adaptations, as may be specified in the notification. 2[(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days, and if, both Houses agree in disapproving the issue of notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses.
- (3)In reckoning any such period of thirty days as is referred to in sub-section (2), no account shall be taken of any period during which the House referred to in sub-section (2) is prorogued or adjourned for more than four consecutive days.
- (4)The copies of every notification issued under this section shall, as soon as may be after it has been issued, be laid before each House of Parliament.]]
Summary
- The Central Government has the power to exempt specific types of banks or financial institutions from this law.
- The government can also decide that the law will apply to certain banks but with specific changes or exceptions.
- To do this, the government must issue a formal notification in the public interest.
- Before making it official, a draft of the notification must be presented to both Houses of Parliament for thirty days.
- Both Houses of Parliament must review the draft and can choose to block it or change it before it becomes effective.
- If Parliament is adjourned or prorogued for more than four days, those days do not count towards the thirty-day review period.
Practical examples
FAQ
1. Who has the authority to exempt a bank from this law?
Only the Central Government has the power to exempt a class of banks, and they must do so in the public interest.
2. Can the Central Government make this decision in secret?
No. They must present a draft of the notification to both Houses of Parliament while they are in session.
3. What happens if Parliament disagrees with the government's exemption?
If both Houses of Parliament agree to disapprove the notification, it will not be issued. If they agree to modify it, it will only be issued in the modified form.
Test yourself
Q1.Under Section 31A of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, who is granted the power to exempt a class of banks from the provisions of the Act?
Q2.Under Section 31A of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, how long must the draft notification for an exemption be laid before each House of Parliament?
Q3.Under Section 31A of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, what happens to the thirty-day parliamentary review period if the House adjourns for six consecutive days?
Q4.Under Section 31A of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, what happens if both Houses of Parliament agree to modify the Central Government's draft notification?