Finance minister Nirmala Sitharaman on Monday tabled the Banking Regulation (Amendment) Bill, 2020 in Lok Sabha. The amendment seeks to ensure the benefit of the depositors by including co-operative banks under the ambit of regulatory framework of the Reserve Bank of India (RBI).
With the new set of amendments, RBI will now be allowed to undertake a scheme of merger of a bank without putting it under moratorium. Prior to this amendment, if a lender was put under the moratorium, it not only capped the withdrawals by depositors, but also barred a bank’s lending operations.
Few more amendments were proposed under section 45 of the act that will help the central bank (RBI) to develop a scheme to ensure the interest of the public, banking system, account holders in the bank and banking company’s proper management, without disrupting any banking functionalities.
Also Read:- FM Nirmala Sitharaman unveils doorstep banking services for PSBs
As per the amendments, these rules will be applicable to cooperative banks also and then ensure stringent regulation for the co-operative banking sector that reported several scams lately.
However, these amendments will not have any affect on the powers that already exist and applicable the state registrars of co-operative societies under state laws.
