RBI to supervise cooperative banks — they will adhere to the same rules as other scheduled banks in India
- Union Information and Broadcasting Minister
Prakash Javadekarannounced today on June 24 that all urban cooperative banks and multi-state cooperative banks will be brought under the supervision of the Reserve Bank of India(RBI).
- This means that the central bank's powers will apply to cooperative banks as they apply to scheduled banks.
- "Depositors' money amounting to ₹4.84 lakh crore in the cooperatives banks will stay safe," said Javadekar.
This means RBI's powers will apply to the cooperative banks as they apply to scheduled banks.
There are about 1,482 crore urban cooperative banks and 58 multi-state co-operative banks with a depositors base of about 8.6 crore across India. "Depositors' money amounting to ₹4.84 lakh crore in the cooperatives banks will stay safe," said Javadekar citing that this will be the 'new normal'.
He said an ordinance in this regard will be promulgated — put into force by official proclamation. These banks will come under the supervision of RBI with immediate effect from date of President’s approval on the ordinance.
The decision comes in the wake of lakhs of depositors facing problems after a scam hit the multi-state Punjab and Maharashtra Cooperative (PMC) Bank. In February, earlier this year, the Union Cabinet approved amendments to the Banking Regulation Act to bring 1,540 cooperative banks under the Reserve Bank of India (RBI) regulation to strengthen cooperative banks to avoid another PMC Bank-like crisis.
(with PTI inputs)
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