India / LS passes bill to bring co-operative banks under RBI supervision

Lok Sabha has passed the Banking Regulation (Amendment) Bill, 2020, to bring co-operative banks under supervision of the RBI in order to protect depositors' money. "This Bill does not regulate co-operative banks. The amendment is not for central government to take over the co-operative banks," Finance Minister Nirmala Sitharaman said. The Bill couldn't be passed in March due to COVID-19.

NDTV : Sep 17, 2020, 10:14 AM
New Delhi: In a bid to protect the interest of depositors, the Lok Sabha on Wednesday passed an amendment to the Banking Regulation Act to bring cooperative banks under the supervision of the RBI.

The Banking Regulation (Amendment) Bill, 2020 replaces an ordinance that was issued on June 26.

Replying to the debate on the bill, Finance Minister Nirmala Sitharaman said this legislation is for depositors' safety and not for undermining powers of the Registrar of Cooperative Societies.

Powers of the Registrar of Cooperative Societies have not been encroached upon but 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 brought under the RBI's supervision process applicable to commercial banks.

There are about 1,482 urban cooperative banks and 58 multi-state co-operative banks with a depositors base of about 8.6 crore.