In a bid to ensure protection of depositors, the Centre is planning to bring all urban and multi-State cooperative banks under the direct supervision of the Reserve Bank of India (RBI). The Union Cabinet has cleared an ordinance in this regard during a meeting on Wednesday.
“In a landmark decision, the urban cooperatives and multi-State cooperative banks, which are 1,540 in number and have a depositor base of 8.6 crore, who have saved Rs 4.84 lakh crore, a huge amount…They have been brought under RBI supervision process, which is applicable to scheduled banks. Depositors will get more security because of today’s decision,” said Prakash Javadekar, Information and Broadcasting Minister.
As of now, these banks come under the dual regulation of the RBI and the Registrar of Co-operative Societies. The step is initiated to ensure that urban and multi-State coop banks come under the supervision of the RBI as after several cases of discrepancies, including the major scam at the Punjab and Maharashtra Co-operative (PMC) Bank were reported. In September, the RBI was forced to supersede the PMC Bank’s board and impose several strict restrictions.
“I am very sure when this announcement was made, people have welcomed it, and depositors will get protection and benefit out of it,” Javadekar said, regarding the ordinance approved by Cabinet.