The Govt on Monday introduced a bill in the Lok Sabha to amend the Banking Regulation Act to bring cooperative banks under the supervision of the Reserve Bank of India (RBI) in order to protect the interests of depositors.
Finance Minister Nirmala Sitharaman introduced the Banking Regulation (Amendment) Bill, which will replace an ordinance that was promulgated in June amid the coronavirus pandemic. Opposition members, including Shashi Tharoor of the Congress and Saugata Roy of the Trinamool Congress, opposed the bill, accusing the Centre of encroaching on the rights of states. Rejecting the charge, Sitharaman asserted that state cooperative laws are not being touched and that the proposed law seeks to bring these banks with same regulations that are applicable on other banks. It is applicable to those cooperative banks which deal with “bank, banker and banking,” she said, adding that as many as 277 urban cooperative banks have reported losses. Tharoor said the bill is an encroachment on federalism, while Roy claimed it attacks “state rights”.