To protect the interests of depositors, the Lok Sabha on Wednesday passed an amendment to the Banking Regulation Act to bring cooperative banks under the supervision of RBI. The Banking Regulation (Amendment) Bill, 2020 replaces an ordinance that was issued on 26 June.
Responding to the debate on the bill, Finance Minister Nirmala Sitharaman said that this law is for the protection of depositors and not for reducing the powers of registrars of cooperative societies.
He said that the powers of the Registrar of Cooperative Societies have not been encroached upon, but the banking activity of the cooperatives would be regulated by the Reserve Bank of India (RBI).
Urban co-operative banks and multi-state co-operative banks will be brought under the RBI supervision process for commercial banks.
There are about 1,482 urban cooperative banks and 58 multi-state cooperative banks based on depositors of about 8.6 crore.