Sunday, April 11, 2021
Home News Reports Union government brings cooperative banks under RBI control through an ordinance

Union government brings cooperative banks under RBI control through an ordinance

So far, the urban and multi-state cooperative banks are registered and governed by the state governments under the respective Co-operative Societies Act of the concerned states

The Union Minister of Information and Broadcasting, Prakash Javadekar on Wednesday said that the government banks, 1,482 urban cooperative banks and 58 multi-state cooperative banks are now being brought under the supervisory powers of the Reserve Bank of India (RBI).

An ordinance to with respect to urban co-operative banks and multi-state co-operative banks was passed by the government on Wednesday with President’s approval that will now immediately bring these banks under the governance of the RBI.

The decision by the government to augment RBI’s supervisory powers over the urban and multi-state co-operative banks comes after Finance Minister Nirmala Sitharaman had announced the government’s intentions of bringing the co-operative banks under the RBI’s supervision in Budget 2020. The ordinance to this effect could not be passed in the Budget session of the parliament.

RBI’s supervision will apply to the cooperative banks like they apply to the scheduled commercial banks.

“The decision to bring 1,540 cooperative banks under RBI’s supervision will provide an assurance to more than 8.6 crore depositors in these banks that their money amounting to Rs 4.84 lakh crore will stay safe,” said Union Minister Prakash Javadekar.

The Minister of Information and Broadcasting also added that the Union Cabinet has given its nod for a scheme “for interest subvention of 2 per cent to Shishu loan category borrowers under Pradhan Mantri Mudra Yojana outstanding as on March 31, 2020, for one year to eligible borrowers.

Besides, the central government also decided to extend the tenure of the OBC Commission by six months in the wake of the coronavirus outbreak, Union minister Prakash Javadekar said. The government also announced Rs 15,000-crore infrastructure fund to provide interest subvention of up to 3% to private players for setting up of dairy, poultry and meat processing units

Cooperative Banks were until now jointly governed by the RBI and respective state governments

The move by the cabinet to grant greater powers to the Reserve Bank of India over the jurisdiction of cooperative banks will provide additional teeth to the central bank in dealing with the cooperative banks that are not exactly registered as bank entities but as cooperative societies. So far, the urban and multi-state cooperative banks are registered and governed by the state governments under the respective Co-operative Societies Act of the concerned states. They also come under RBI jurisdiction under the Banking Regulation Act, 1949.

However, lately, multiple corruption cases, structural weaknesses and pervasive collapses of the cooperative banks had resulted in demands for greater control of these banks, who have now developed substantial deposit and credit base, by a competent authority on par with the nationalised banks. Cooperative banks were hitherto jointly controlled by the RBI and the respective state governments but in the aftermath of the Punjab and Maharashtra Cooperative (PMC) Bank fiasco last year, the Union Cabinet in February 2020 amended Banking Regulation Act to strengthen the cooperative banks in the country.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

OpIndia Staff
Staff reporter at OpIndia

Related Articles

Trending now

Shambhu priest death case: Protestor dead in police action, shops on temple land to remain sealed and finally Rajasthan govt agreeing to order probe

A probe has been initiated by Rajasthan government after 10-day agitation led by BJP leader Kirodi Lal Meena

Hindu activists in Kerala object to Muslim League flags outside Temple, stop movie shoot, arrested: Read details

One of the scenes showed a girl dressed in traditional Hindu attire exiting the temple and being attracted to a man of a different religion (Islam).

Rahul Gandhi decides to campaign in West Bengal, but in one constituency, only hours before ‘silence period’ kicks in: How it might impact Congress

Congress Scion Rahul Gandhi will be visiting West Bengal on April 14 in the hopes to turn around his party's political fortunes.

Farmer Protest supporters demand release of multiple-murder accused Jagtar Singh Johal, use a special ‘Toolkit’ to ‘#FreeJaggiNow’

Supporters of Jagtar Singh Johal are using Farmers Protests for their own agenda demanding release of the multiple murder accused

Senior doctor in-charge of COVID-19 ward in Bhopal resigns after Congress leader and sidekick misbehave with him, hospital staff: Full details

Congress leader P C Sharma along with a local corporator Guddu, can be seen misbehaving with a senior doctor Yogendra Shrivastav in Bhopal

Asked BARC to pay if they wanted to avoid torture: Sachin Vaze, money laundering and the Rs 30 lakh bribe in TRP case

Citing sources, TOI reported that BARC officials had admitted to the ED about making such a payment to Sachin Vaze via an inspector.

Recently Popular

USA: Police officers show up at Twitter user’s home for criticising Congresswoman AOC on social media, her spokesperson denies involvement

Two policemen visited the home of an American citizen for tweeting against Alexandria Ocasio-Cortez (AOC).

Maharashtra Congress leader slams Aaditya Thackeray for clearing Rs 3,693 crores to renovate bungalows of Shiv Sena corporators

Janardan Chandurkar requested governor to intervene after Aaditya Thackeray allotted Rs3,693 crores to Shiv Sena corporators

Watch: Arnab Goswami’s special message for Barkha Dutt after Sachin Vaze lands in Taloja Jail

Without explicitly naming Barkha Dutt, Arnab Goswami slammed the journalist for celebrating his unlawful arrest.

Prashant Kishor says internal survey shows BJP win, hails PM Modi, admits TMC’s Muslim appeasement politics: Here is everything he said on Clubhouse

"Major problem that we have to accept is that there have been efforts for the last 20 years to appease the minorities," said Prashant Kishor

Lutyens journalist speaking ‘truth to the power’ by discussing Mamata Banerjee’s toilet routine

An embarrassed Prashant Kishor jokingly asked the Lutyens journalist, "Am I expected to answer this also?"

Massive win for Arnab Goswami as Mumbai Police terminates all chapter proceedings against Republic media network: Read details

Republic TV has announced that all chapter proceedings initiated by the Mumbai Police have bow been terminated.
- Advertisement -


Connect with us