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