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.
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.