New Delhi: The Union Cabinet on Wednesday decided to bring co-operative banks under the Reserve Bank of India (RBI) through an ordinance.
Announcing the Cabinet decision at a virtual press conference, Union Information and Broadcasting minister Prakash Javadekar said, “Government banks, including 1,482 urban cooperative banks and 58 multi-state cooperative banks, are now being brought under supervisory powers of the RBI.” It will be effective from the date of President’s approval to the ordinance, he added.
At present, there are more than 8.6 crore depositors in over 1,540 urban and multi-state cooperative banks in the country. Depositors’ money amounting to ₹4.85 lakh crore in the cooperatives banks which will be under the RBI supervisory process as in case of scheduled commercial banks will be safe, Javadekar said.
The Cabinet had amended the Banking Regulation Act to strengthen the cooperative banks last year in the wake of Punjab and Maharashtra Cooperative Bank scam.
While presenting Budget 2020, Finance Minister Nirmala Sitharaman had also announced that the cooperative banks will be brought under the ambit of RBI.
The government also announced to provide two per cent interest subvention to borrowers under the ‘Shishu’ category of the Pradhan Mantri MUDRA Yojana (PMMY). Under this category, collateral-free loans upto ₹50,000 will be given to the beneficiaries.
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