New Delhi: As the new radical changes come into effect for the Indian corporates, especially banks and other financial institutions, the stock markets have reacted much more positively sending the stocks of the sector into the green zone. As per the new bill, companies will have to grant greater rights to their shareholders, and also will be equipped to bring in Foreign Direct Investment (FDI), especially the banking companies.
Banking shares gained, with State Bank of India up 1%, while Bank of India gained 1.3%. Shriram Transport Finance rose 2.2%, while Mahindra & Mahindra Financial Services added 1.9%. The new Companies Bill will be replacing the existing Companies Act 1956, by bringing in sweeping changes including greater shareholder rights, complusory spending on corporate social responsibility, freedom to bring in foreign investment to the company. Most importantly, there will be greater powers with the Serious Fraud Investigation Office to look into volumnous cases coming up in the corporate sector.