In Relief for Depositors, Govt Brings All Cooperative Banks under RBI Supervision

There was a cabinet meeting on Wednesday led by Prime Minister Narendra Modi. After the meeting, Union Minister Prakash Javadekar said that the ordinance for major reforms in space science and banks has been approved today. Now government banks (be it urban co-operative banks or multi-state co-operative banks) will come under the Reserve Bank’s supervision power.

Union Minister Prakash Javadekar said that 1482 public sector banks including urban cooperative banks and 58 multi-state cooperative banks are now being brought under the supervision of Reserve Bank of India (RBI). Just as the powers of RBI apply to scheduled banks, it will also apply to cooperative banks.

“Government banks, including 1,482 urban cooperative banks and 58 multi-state cooperative banks, are now being brought under supervisory powers of Reserve Bank of India (RBI),” Javadekar said.

He also said that the decision to bring 1,540 cooperative banks in the Supervision of RBI will benefit their account holders. More than 8.6 crore depositors in these banks will give assurance that deposits of 4.84 lakh crore in these banks will be safe.

Very important decisions have been taken in the Union Cabinet meeting. There has been a huge improvement in the field of space science. Till date, we have made good development in space, now these are being opened in a way for everyone’s use. Kushinagar Airport is being declared as an international airport, he added.

Javadekar said that the Union Cabinet has approved the extension of the tenure of the Commission constituted to investigate the issue of sub-classification within the Other Backward Classes and up to six months i.e. 31 January 2021.

After the Punjab and Maharashtra Cooperative (PMC) Banks fiasco last year, the Union Cabinet in February amended Banking Regulation Act to strengthen the cooperative banks in the country. During Budget 2020, Finance Minister Nirmala Sitharaman also announced that cooperative banks will be brought under the ambit of RBI.

The government also announced to provide 2% interest subvention to borrowers under the ‘Shishu’ category of the flagship Pradhan Mantri MUDRA Yojana (PMMY). Under the Shishu category, collateral free loans of up to ₹50,000 will be given to beneficiaries.

“The Union Cabinet has approved the scheme for interest subvention of 2% to Shishu loan category borrowers under PMMY, outstanding as on March 31, 2020, for a period of 12 months to eligible borrowers,” Javadekar said.

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