Bill to give RBI powers to regulate cooperative banks introduced in LS

Introducing the Banking Regulation (Amendment) Bill, 2020, Ms Sitharaman said the proposed legislation will help prevent a repeat of Punjab and Maharashtra Cooperative Bank-like crisis.

To further bolster the confidence of customers, the government has increased deposit insurance cover by five-fold to Rs 5 lakh to ensure security of public money in banks, she said.

The Bill proposes to bring the cooperative banks on a par with the developments in the banking sector through better management and proper regulation of cooperative banks with a view to ensure that the affairs of the cooperative banks are conducted in a manner that protects the interests of depositors.

The Bill proposes to strengthen the cooperative banks by increasing professionalism, enabling access to capital, improving governance and ensuring sound banking through the RBI.

According to the provisions in the bill, the RBI will consult state governments before issuing order for supersession of boards of cooperative banks registered with states.

Piloting the Banking Regulation (Amendment) Bill, Ms Sitharaman said the law will give protection to the depositors.

She said if the opposition thinks they can stall the move of the government when it is taking steps for the welfare of the depositors, 'it's a shame'.

Speaker Om Birla took up the Bill clause by clause but could not proceed amid pandemonium.