New Delhi: The Banking Laws Amendment Bill seeking to align the voting rights in banks in proportion with the equity holding on Thursday got a green signal from government.

The Amendment Bill, which was cleared by the Union Cabinet, will now be tabled in Parliament for approval, sources said.

Once approved by Parliament, the amendments will enhance the voting power of shareholders in line with the portion of equity held by them.

Presently, the voting right of a shareholder is limited to one per cent in state-owned banks and 10 per cent in private banks irrespective of the equity holding.

In his budget speech, Finance Minister Pranab Mukherjee has listed banking laws amendment legislation as one of the seven bills that government proposed to take up to pursue financial sector reforms.

"The financial sector reforms initiated during the early 1990s have borne good results for the Indian economy. The UPA Government is committed to take this process further", Mukherjee had said in his budget speech.

Besides the Banking Laws Amendment Bill, the other important financial sector bills that Mukherjee proposed to pursue include Insurance Laws (Amendment) Bill, 2008, Life Insurance Corporation (Amendment) Bill, 2009 and revised Pension Fund Regulatory and Development Authority Bill, 2005.

(Agencies)