The Ordinance will seek to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight.
27 June 2020 Current Affairs:President Ram Nath Kovind promulgated the Banking Regulation (Amendment) Ordinance, 2020. It is in pursuance with the commitment to ensure the safety of depositors across banks. The Ordinance will amend the Banking Regulation Act 1949 as applicable to Cooperative Banks.
Highlights:
♦ The Ordinance will seek to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight.
♦ The ordinance will extend powers that are already available with RBI in respect of other banks to Co-operative Banks and 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.
♦ The amendments 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 will amend Section 45 of the Banking Regulation Act, to enable the making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public, depositors, and the banking system.
♦ The ordinance will also secure its proper management, even without making an order of moratorium, so as to avoid disruption of the financial system.
Highlights:
♦ The Ordinance will seek to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight.
♦ The ordinance will extend powers that are already available with RBI in respect of other banks to Co-operative Banks and 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.
♦ The amendments 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 will amend Section 45 of the Banking Regulation Act, to enable the making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public, depositors, and the banking system.
♦ The ordinance will also secure its proper management, even without making an order of moratorium, so as to avoid disruption of the financial system.