Finance Minister Nirmala Sitharaman stated this legislation is for depositors’ security

New Delhi:

In a quote to secure the interest of depositors, the Lok Sabha on Wednesday passed a modification to the Banking Regulation Act to bring cooperative banks under the guidance of the RBI.

The Banking Regulation (Amendment) Bill, 2020 changes a regulation that was released on June 26.

Replying to the argument on the costs, Finance Minister Nirmala Sitharaman stated this legislation is for depositors’ security and not for weakening powers of the Registrar of Cooperative Societies.

Powers of the Registrar of Cooperative Societies have actually not been trespassed upon however banking activity of cooperatives will be controlled by the Reserve Bank of India (RBI), she stated.

Urban cooperative banks and multi-state cooperative banks will be brought under the RBI’s guidance procedure appropriate to business banks.

There have to do with 1,482 city cooperative banks and 58 multi-state co-operative banks with a depositors base of about 8.6 crore.