An Insurance Amendment Bill will be tabled in the parliament so as to make necessary changes to the Insurance Act, 1938. The bills will carry rules on minimum capital adequacy for insurance companies and penalties. The ministry of finance has met with a request from the National Association of Software and Service Companies to remove the tax demand made on information technology companies on their employee stock option plans. The software association feels that professionals should be allowed to sell stock options out of their own choice and not be forced to do so to meet a tax liability. The rupee touched 43.54 a dollar on 13 October 1999 before rallying to close at 43.44.
Dealers fear a slowdown in capital inflows owing to the military coup in Pakistan.
Call rates shot up to a maximum of 18 per cent as dealers and banks were finding it tough to fund the securities held by them. Dealers feel that call rates will ease as they expect a cut in the cash reserve ratio. As proposed by the Verma panel, a Financial Restructuring Authority will manage the government's holding in public sector banks. The FRA, which will be in existence for seven years, will decide on the disinvestments to be made in the banks, enter into memoranda of understanding with weak banks, set targets for the banks and penalise banks that do not achieve the targets. The Reserve Bank of India is unable to give a clear direction on the method of computing of the 15 per cent.