The parliamentary standing committee on finance yesterday overwhelmingly endorsed the Reserve Bank of India's (RBI's) recommendation to dilute sections of the anti-money laundering and the foreign exchange management Bills as they "seem worse than the Foreign Exchange Regulation Act (Fera) which they propose to replace".
The dissenters in the meeting were members from the Left parties. The committee will submit its report on the Bills soon.
The standing committee met yesterday under the chairmanship of Murli Deora to discuss the two Bills. It was attended by finance secretary Vijay Kelkar, enforcement director M K Bezbaruah and revenue secretary Javed Chowdhary.
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Sources said the "majority of the members in the committee felt the two Bills must be toned down as in the present form they are worse than Fera".
"Except for a couple of members from the Left, the majority felt that the two Bills are worse than Fera. The committee will come up with a report suggesting changes in the two Bills," sources said. The Bills were introduced in the Lok Sabha in the recently concluded Budget session.
The Reserve Bank of India (RBI) last week opposed the anti-money laundering Bill saying it would derail reforms.
The Bill grants the government sweeping powers to prosecute and attach property of anyone engaged in money laundering.
It seeks to make money laundering a cognizable, non-bailable offence.
It is feared that a large number of businessmen could be punished under the legislation as Section 477A of the Indian Penal Code, pertaining to falsification of accounts, is included in the money laundering Bill.
Sources said the section on falsification of accounts is loosely defined and provides adequate scope for harassment.
There is also opposition to the provision that requires financial institution and intermediaries to record transactions exceeding Rs 25 lakh within a month.