Finance minister P Chidambaram rejected BJP's demand to dump a controversial provision from a bill to amend banking laws, saying suggestions to include the new provision were made by the standing committee on food & consumer affairs.

Not convinced with Chidambaram's argument, the BJP said that it had serious apprehensions against bringing forward trading under the realm of banking laws because it would affect small investors. The main Opposition party added that it would come back with a structured response.

A source in the BJP confided, "We have said that we will come back with a structured response soon. However, we made it clear that the party has serious apprehensions against bringing forward trading under the ambit of banking laws."

The Banking Law (amendment) Bill would pave the way for Reserve Bank of India (RBI) to issue new banking licenses. It also aims to raise the voting rights of investors in private sector lenders to 26 per cent, from existing 10 per cent.

It also seeks to allow the central bank to supercede private sector banks' boards and hike the cap on investors' voting rights in public sector banks from 1 per cent to 10 per cent.

Yashwant Sinha, senior BJP leader & chairman of the standing committee on finance, said that the government included three new provisions in the bill that were not part of the legislation when it was placed before the panel for scrutiny.

While the Opposition has harshly criticizing the bill, the government is optimistic that it would be able to get the bill passed in the same way in which it managed to get a bill on security & debt recovery laws passed on Monday.