Co-Operative Banks To Be Regulated By The RBI
[ By Bobby Anthony ]The union cabinet has taken a decision to bring banking operations of as many as 1,540 co-operative banks under the regulation of the Reserve Bank of India (RBI), Union Minister Prakash Javadekar has stated.This would mean that the norms of commercial banks will be applicable to co-operative banks as well, under the Banking Regulation Amendment Act 2019.However,...
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The union cabinet has taken a decision to bring banking operations of as many as 1,540 co-operative banks under the regulation of the Reserve Bank of India (RBI), Union Minister Prakash Javadekar has stated.
This would mean that the norms of commercial banks will be applicable to co-operative banks as well, under the Banking Regulation Amendment Act 2019.
However, Javadekar clarified that the administrative system of co-operative banks will continue as per rules of the Co-operative Registrar as usual and that RBI norms will apply only to the banking system of co-operative banks.
He informed that 8.6 crore people have deposited their money in 1,540 co-operative banks which have deposits worth Rs 5 lakh crore.
Javadekar said that permission will be granted to appoint co-operative bank CEOs. RBI will issue guidelines in this regard and audits will be done as per RBI rules, he said.
“Rules will also have to be followed for loan waiver. If the situation worsens, RBI will also have the rights to supersede and take control of the bank,” he added.
“Most cooperative banks are functioning well in the country, but wrong practices by few banks malign the entire sector. This step has been taken to protect depositors' money. Earlier, in the budget, bank deposit insurance cover was increased to Rs 5 lakh,” he said.
