To ensure the protection of depositors, the Center decided to place all urban and multi-state cooperative banks under the direct supervision of the Reserve Bank of India (RBI). The Union cabinet approved an ordinance to this effect at its meeting on Wednesday.
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“In a landmark decision, the urban co-operatives and multi-state co-operative banks, of which there are 1,540 and have a deposit base of 8.6 crore, which saved 4.84 lakh crore, a huge sum. . They have been placed under RBI supervision process, which is applicable to listed banks. Depositors will benefit from greater security thanks to today’s decision, “said Minister of Information and Broadcasting Prakash Javadekar to reporters after the meeting.
Currently, these banks fall under the dual regulation of the RBI and the Registrar of Co-operative Societies. The decision to place these urban and multi-state cooperative banks under the supervision of the RBI comes after several cases of fraud and serious financial irregularities, including the major scam at the Punjab and Maharashtra Co-operative (PMC) Bank’s last year. In September, the RBI was forced to replace the PMC Bank board and impose strict restrictions.
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“I am very sure that when this announcement was made people welcomed it and depositors will benefit and benefit from it,” Mr. Javadekar said of the cabinet approved ordinance.
The Cabinet also approved a program providing a 2% interest subsidy for a period of 12 months to small borrowers with loans of up to 50,000 in the Shishu category of the Pradhan Mantri Mudra Yojana. This relief was announced under the Aatmanirbhar Bharat program last month.