Cabinet Clears Amendments To Ensure Greater RBI Control Over Cooperative Banks

News:The Union Cabinet has approved amendments to the Banking Regulation Act to give the Reserve Bank of India greater control over cooperative banks.

Facts:

Key provisions of the amendments:

• Cooperative banks will be brought under the regulation of the RBI. 
• The RBI will have the power to supersede and take control of the cooperative banks if the bank’s financial health deteriorates. 
• Cooperative banks will need RBI permission to appoint a CEO 
• Cooperative bank audits will have to be done as per RBI guidelines

About Co-operative bank:

• Co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank.
• Cooperative Banks are registered under the States Cooperative Societies Act.They are also regulated by the Reserve Bank of India (RBI).
• They are classified into two categories namely Urban Co-operative Banks(UCBs) and rural co-operative banks.