The Finance Minister Nirmala Sitharaman has introduced the Banking Regulation (Amendment) Bill, 2020 in Lok Sabha.
The bill sought to amend the Banking Regulation Act, 1949 and seeks to give the Reserve Bank of India (RBI) the powers to regulate cooperative banks. It provides for issue and regulation of paid-up share capital and equities by cooperative banks.
According to the provisions in the bill, the RBI will consult state governments before issuing the order for the supersession of boards of cooperative banks registered with states. However, if passed the act will not be applicable to primary agricultural credit society and cooperative society whose primary objective is providing long term finance for agriculture in case it is not into banking functions or draws cheques.
The bill comes in the wake of the crisis at the Punjab & Maharashtra Co-operative (PMC) Bank last year.