Government to bring co-operative banks under RBI through an ordinance
New Delhi : The Union Cabinet on Wednesday announced to bring all co-operative banks under Reserve Bank of India through an ordinance, announced Prakash Javadekar at a press conference.
"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 today.
The banks will come under the supervision of Reserve Bank of India soon after the ordinance gets approval from the President of India.
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.
More than 8.6 crore depositors have invested their money in these banks amounting to a sum of Rs 4.84 lakh crore. The money of all the investors will remain safe during the process, announced Javadekar.
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 Rs 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.