A bill to empower the Reserve Bank under the control of cooperative banks has been passed in the Lok Sabha

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The Banking Regulations (Amendment) Bill, 2020 relating to giving more powers to the Reserve Bank (RBI) to control cooperative banks, was passed in the Lok Sabha today by voice vote. Finance Minister Nirmala Sitharaman said in the House in response to the three-hour discussion on the bill, “Cooperative banks have been under the control of the RBI since 1965. We are not doing anything new. What is new in the interest of depositors. This law has been introduced to protect trademarks. “

Sitharaman said that the contribution of cooperative banks in providing loans to farmers and the poor in rural areas should not be forgotten, but it should not be forgotten that 430 licenses of cooperative banks have been revoked and revoked in the last two decades. . At this time, not a single commercial bank went underground because their depositors were protected by the Banking Act. Thus, it was necessary to bring cooperative banking activities within the scope of this Act.

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Regarding the need to bring an ordinance in these amendments, the Finance Minister said that the financial situation of cooperative banking was expected to deteriorate during the Kovid-19 epidemic. In this situation it was necessary to bring an ordinance to protect the interests of the depositors as there was no Parliament session at that time. He clarified that the amendment would not change the membership structure of the cooperative bank. All members will continue to get the same suffrage as before.

Reacting to all the fears of one opposition party after another, Nirmala said that the law does not give the central government the right to control the cooperative banks. It only empowers the RBI to regulate the banking activities of cooperative banks. However, he did not mention Punjab and Maharashtra Cooperative (PMC) Bank in its reply. Members of the Nationalist Congress Party and Shiv Sena raised the issue during the discussion.

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Opponents called the bill an interference in states’ rights over cooperatives. Congress leader Adhir Ranjan Chowdhury Chowdhury has alleged that the government is trying to privatize the cooperative bank. He said it would jeopardize the autonomy of cooperative banks.

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