Amendments to ensure better management and sound regulation of Cooperative banks
– globalbihari bureau
New Delhi: The President has promulgated the Banking Regulation (Amendment) Ordinance, 2020, which amends the Banking Regulation Act, 1949 as applicable to Cooperative Banks, a finance ministry press communique said on Saturday.
The Ordinance seeks to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight by extending powers already available with Reserve Bank of India in respect of other banks to Co-operative Banks as well for sound banking regulation, and “by ensuring professionalism and enabling their access to capital”.
The amendments do not affect existing powers of the State Registrars of Co-operative Societies under state co-operative laws. They also do not apply to Primary Agricultural Credit Societies (PACS) or co-operative societies whose primary object and principal business is long-term finance for agricultural development, and which do not use the word “bank” or “banker” or “banking” and do not act as drawees of cheques.
The Ordinance also amends Section 45 of the Banking Regulation Act, to enable making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public, depositors and the banking system and for securing its proper management, even without making an order of moratorium, so as to avoid disruption of the financial system.