In an effort to protect the interests of depositors, the Lok Sabha on Wednesday passed an amendment to the Banking Regulation Act to place cooperative banks under the supervision of the RBI.
The Banking Regulation (Amendment) Bill, 2020 replaces an ordinance promulgated on June 26.
In response to the debate on the bill, Finance Minister Nirmala Sitharaman said that this legislation is for the safety of depositors and not to undermine the powers of the Registrar of Cooperative Societies.
The powers of the Registrar of Cooperative Societies have not been infringed, but the banking activity of cooperatives will be regulated by the Reserve Bank of India (RBI), she said.
Urban cooperative banks and multi-state cooperative banks will be subject to the RBI supervision process applicable to commercial banks.
There are approximately 1,482 urban cooperative banks and 58 multi-state cooperative banks with a depositor base of approximately 8.6 crore.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
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