New Delhi: The Rajya Sabha yesterday passed the Banking Regulation (Amendment) Bill, 2020, to bring co-operative banks under the supervision of the Reserve Bank of India (RBI).
The central government had brought an ordinance in June to amend the law which was signed by President of India Ram Nath Kovind on June 26. The bill replaced the ordinance.
While introducing the Amendment Act, Finance Minister Nirmala Sitharaman said that the amendment in the Banking Regulation Bill will completely protect the interest of depositors and will help with quick recovery in cases of stressed co-operative banks without any moratorium.
According to the Finance Minister, the legislation empowers the central bank to regulate only the banking activities of co-operatives and it is not applicable to a primary agricultural credit society or a co-operative society providing finance for agricultural development.
“By amending Section 45 we are able to give a quick recovery, quick payback, and also make sure the interests of the depositors are safeguarded,” Sitharaman said in Rajya Sabha.
The bill has already been passed by the Lok Sabha on September 16.
The country has various types of co-operative banks such as urban co-operative banks (UCBs) and rural co-operative banks (RCBs); and RCBs are further classified into state co-operative banks (StCBs) and district central co-operative banks (DCCBs).
-India Legal Bureau