The Union Cabinet on Wednesday decided to bring all cooperative 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 meet.
Mr. Javadekar addressed the media briefing on Cabinet decision from his residence, saying "this is the new normal".
“Depositor will be assured his money is safe,” he said.
There are about 1,482 crore urban cooperative banks and 58 multi-state co-operative banks with a depositors base of about 8.6 crore.
In the wake of the Punjab & Maharashtra Cooperative (PMC) Bank crisis, the Union Cabinet in February approved amendments to the Banking Regulation Act to bring 1,540 cooperative banks under the Reserve Bank of India (RBI) regulation.
During her Budget speech, Finance Minister Nirmala Sitharaman had mentioned that cooperative banks would be brought under the ambit of the RBI. However, the Banking Regulation (Amendment) Bill, 2020, could not be passed in the Budget session of the parliament, since it had to be curtailed due to COVID-19 pandemic.
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