Finance Minister introduces bill to amend Banking Regulation Act
On March 3, 2020, Finance Minister Nirmala Sitaraman introduced bill in Parliament to amend banking regulation law to regulate cooperative banks. It aims to prevent frauds as that seen at Punjab and Maharashtra Cooperative Banks (PMC).
The Banking Regulation (Amendment) Bill, 2020 intends to regulate 1,540 cooperative banks with total savings of Rs 5 lakh crores. It also aims to protect the small depositors that struggle a lot during frauds like that of PMC. The withdrawal limit of PMC banks was limited to Rs 1000 during the crisis. This had put several customers in an insecure environment.
Key Features of the Amendment
The amendments are being made only to multi-state cooperative banks and urban cooperative banks. The Cooperative Banks are currently under dual control of both RBI and Registrar of Cooperative Societies. With the amendment, RBI will have extra powers apart from regulatory functions such as capital adequacy and cash reserve. However, the administrative role of the bank is to continue with the Registrar of Societies.
Category: Legal & Constitution Current Affairs