1500 cooperative banks brought under RBI supervision

The Union Cabinet on Wednesday has decided to bring all co-operative banks under the supervision of Reserve Bank of India through an ordinance. These banks will be supervised by the RBI in the same way as the scheduled banks. In this way, the government offers protection to depositors and reduces mismanagement.

This was announced by Union information and broadcasting minister Prakash Javadekar during a virtual press conference.

“All urban cooperatives and multistate cooperative banks are being brought under the supervision of the Reserve bank of India. There are 1,540 such banks that hold close to Rs 5 lakh crore worth of deposits from over 8 crore lakh account holders. The move to bring them under the RBI will give depositors the assurance that their savings are safe in these banks,” Javadekar said.

Finance Minister Nirmala Sitharaman had announced the government’s intention to bring the cooperative banks under RBI’s supervision. She had said that it will be done through an amendment to the Banking regulation act. According to the new rules, the appointment of CEOs in cooperative banks will now require prior approval from RBI.

After the Punjab and Maharashtra Cooperative (PMC) Banks fiasco last year. The Union Cabinet in February amended Banking Regulation Act.

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