Having passed the two bills related to agriculture sector that led to violent outbursts by the members of the opposition in the Rajya Sabha, the government also managed to pass the important Banking Regulation (Amendment) Bill, 2020 on Tuesday (22 September).
The bill was passed in the Lok Sabha on September 16.
This bill will now bring the co-operative banks under the Reserve Bank of India (RBI) for monitoring, due-deligence and supervision.
Speaking at the upper house of the Parliament, Union Finance Minister Nirmala Sitharaman, said that many of these co-operative banks had faced crisis amid the Covid-19 pandemic, as reported by the Hindustan Times.
The official handle of the Finance Minister tweeted that “While we acknowledge the important contribution of cooperative banks, it is necessary in the interest of the depositors and banks themselves that we extend some banking laws to the cooperative banking activity.”
While we acknowledge the important contribution of cooperative banks, it is necessary in the interest of the depositors and banks themselves that we extend some banking laws to the cooperative banking activity: Smt @nsitharaman on Banking Regulation (Amendment) Bill 2020 in LS pic.twitter.com/Crn4TeSa9P
— NSitharamanOffice (@nsitharamanoffc) September 16, 2020
The RBI will now monitor their finances and losses and the banks will now be monitored by the central bank like the other scheduled banks.
This supervision by the RBI’s intervention will ensure protection to depositors and ensure less scope for mismanagement.
In June this year the government had brought in an ordinance to amend the law which was signed by President of India Ram Nath Kovind and now the bill passed by both houses of the parliament stands as a law.
Other bills passed in the Rajya Sabha were: Companies (Amendment) Bill, 2020; Banking Regulation (Amendment) Bill 2020; Essential Commodities (Amendment) Bill, 2020; Indian Institutes of Information Technology Laws (Amendment) Bill, 2020; National Forensic Sciences University Bill, 2020
The amendments to Banking Regulation Act, 1949 will not impact existing powers of the State Registrars of Co-operative Societies under state co-operative laws. It will also not apply to Primary Agricultural Credit Societies (PACS) or co-operative societies.