Union Cabinet Approves Ordinance To Bring Urban & Multi-State Cooperative Banks Under RBI Supervision

The Union Cabinet on Wednesday approved an Ordinance to bring urban cooperative banks and multi-state cooperative banks under the supervision of Reserve Bank of India.

This was announced by Union Minister Prakash Javadekar in a media briefing about the cabinet decisions.

"It will give an assurance to 8.6 crore depositors in these banks that their money will stay safe", the Minister said.

The decision assumes relevance in the backdrop of the Punjab and Maharashtra Cooperative Bank scam, affecting lakhs of depositors.

In April, a Constitution Bench of the Supreme Court had held that cooperative banks must comply with the provisions of the Banking Regulation Act with respect to their operations. The SC also held that SARFAESI Act was applicable to cooperative banks.