Cooperative banks to be supervised and brought under the ambit of RBI; govt to bring an ordinance

The Union Cabinet on Wednesday 24th June 2020 decided to bring all co-operative banks under the Reserve Bank of India through an ordinance. This was announced by Union information and broadcasting minister Prakash Javadekar during a virtual press conference.

"Government banks, including 1,482 urban cooperative banks and 58 multi-state cooperative banks, are now being brought under supervisory powers of Reserve Bank of India (RBI)," Javadekar said today. These banks will come under the supervision of RBI with immediate effect from date of President’s approval on the ordinance.

The RBI's powers as they apply to the scheduled banks will also apply to cooperative banks, said the minister.

After the Punjab and Maharashtra Cooperative (PMC) Banks fiasco last year, the Union Cabinet in February amended Banking Regulation Act to strengthen the cooperative banks in the country. During Budget 2020, Finance Minister Nirmala Sitharaman also announced that cooperative banks will be brought under the ambit of RBI.

The decision to bring 1,540 cooperative banks under RBI's supervision will give an assurance to more than 86 million depositors in these banks that their money amounting to Rs 4.84 trillion will stay safe, he added.

Source: Business Standard,, LiveMint

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