Union Cabinet approves ordinance to bring 1,540 co-operative banks under RBI supervision

The Modi government has decided to bring Urban Co-operative Banks (UCBs) and Multi-State Co-operative Banks under the governance of the Reserve Bank of India (RBI). Union Minister Prakash Javadekar on Wednesday announced that over 1,500 UCBs and multi-state co-operative banks will be brought under the supervisory power of the central bank.

"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's powers as they apply to scheduled banks will apply for cooperative banks as well," Javadekar told reporters through video conferencing.

READ | Centre Re-nominates Tata Sons' Chandrasekaran To RBI Central Board For Two Years

READ | Google Pay Not A Payment System Operator: RBI To Delhi High Court

Assurance of safety to depositors

He said the to bring those banks under RBI's supervision will give an assurance to more than 8.6 crore depositors in these banks that their money amounting to Rs 4.84 lakh crore will stay safe. The Union Cabinet has approved an ordinance in this regard and with immediate effect from the date of President’s nod on the ordinance, the co-operative banks in the country will come under the RBI's supervision.

Prakash Javadekar further said that the Union Cabinet has approved a scheme "for interest subvention of 2% to Shishu loan category borrowers under Pradhan Mantri Mudra Yojana, outstanding as on March 31, 2020, for one year to eligible borrowers."

(Photo Credit: PTI)

READ | RBI Extends Moratorium On PMC Bank Till December 22; Withdrawal Limit Capped At Rs 1 Lakh

READ | Aaditya Writes To Javadekar; Opposes Auction Of Mine Near Tadoba-Andhari Tiger Reserve