Co-Operative Banks Under RBI Supervision

The government has said that all urban cooperative banks and multi-state cooperative banks will come under the supervision of the Reserve Bank of India (RBI), a development aimed at providing comfort to depositors and prevent repeat of Punjab and Maharashtra Co-operative (PMC) Bank-like scams. The President of India will promulgate an ordinance to this effect, information and broadcasting Minister Prakash Javadekar told media after the meeting of the Union cabinet. Finance minister Nirmala Sitharaman had introduced 'The Banking Regulation (Amendment) Bill, 2020' in Lok Sabha on March 3, 2020, which is pending approval. The proposed law sought to enforce banking regulation guidelines of the RBI on co-operative banks. Terming it a landmark decision, the minister said 1,540 urban cooperative banks and multi-state cooperative banks will be brought under the RBI supervisory process as is applicable in case of scheduled commercial banks. There are 1,482 urban cooperative banks and 58 multi-state cooperative banks having about 8.6 crore depositors with total savings deposit of about Rs 4.85 lakh crore. The decision assumes significance in the wake of a scam in PMC Bank and some other cooperative banks affecting lakhs of customers who are facing difficulty in withdrawing their money due to restrictions imposed by the Reserve Bank of India.