Cooperative Banks brought under RBI Supervision
The government has brought all the cooperative banks and multi-state cooperative banks under the supervision of the Reserve Bank of India (RBI). The government is expected to introduce an ordinance to put such banks under the supervision of RBI. The purpose is to bring relief to the depositors of such banks and prevent the repetition of Punjab and Maharashtra Co-operative (PMC) Bank like scams. This will bring 1,482 urban cooperative banks and 58 multi-state cooperative banks, under the supervisory powers of the Reserve Bank of India.
The decision is considered to be important in view of the fact that PMC bank kind of instances creates acute suffering on part of customers in withdrawing their deposits because of the restrictions of the regulator. It is noteworthy to mention that recently RBI had imposed certain regulatory curbs on PMC Bank after certain financial irregularities and wrong reporting of loans given to real estate firm HDIL came to surface. Similarly, RBI had put certain restrictions on withdrawal from People's Co-operative Bank, Kanpur.
