Bill passed in Lok Sabha to bring co-operative banks under RBI supervision
New Delhi | Jagran Business Desk: The Banking Regulation (Amendment) Bill, 2020 was passed in the Lok Sabha on Wednesday. The bill, moved by Finance Minister Nirmala Sitharaman, was brought to protect the interest of the depositors of the co-operative banks. It replaces an ordinance the Union Cabinet had approved in June. Sitharaman said it was necessary for the government to come out with an ordinance to improve the condition of the co-operative banks as well as to safeguard the depositors' money.
The latest amendment empowers the Reserve Bank of India to undertake a scheme of amalgamation of a bank without placing it under moratorium. Earlier, if a lender was put under the moratorium, it not only restricted the withdrawals by depositors but also had an impact on bank’s lending operations.
Responding to the queries raised by 32 MPs during the session. She said, "We want to regulate banking activity, within our power and will not interfere into 'federalism'. The amendment is not for central govt to take over the cooperative banks,"
The Finance Minister also drew the parliament's attention towards the poor condition of the co-operative banks in the country. She said that the financial status of 277 urban cooperative banks is weak while 105 cooperative banks are unable to meet the minimum regulatory capital requirement. The net worth of 47 banks is in negative while 328 urban cooperative banks have more than 15% gross NPA ratio.
"This Bill does not regulate cooperative banks. The amendment is not for central govt to take over the cooperative banks. It is not for the first time that this regulation of extending some powers to RBI is happening," she added.
Calling the latest amendment an attack on federalism, AIMIM leader Asaduddin Owaisi asked the government why it intervened in the Yes Bank crisis but not in the case of the PMC Bank crisis.
Posted By: Rakesh Kumar Jha