Ashok Gehlot urges PM Modi to annul cooperative-related amendments of banking law

Terming some amendments in the Banking Regulation Act “contrary to the basic spirit” of states’ cooperative banks, Rajasthan Chief Minister Ashok Gehlot has urged Prime Minister Narendra Modi to restore the original cooperative-related provisions of the banking law.

Gehlot has written to the chief minister making his request, an official statement said on Tuesday. “Through Bill No 56 recently passed in Parliament, sections 10 and 10A of the Banking Regulation Act have been made effective for cooperative banks,” the chief minister wrote to the PM in his letter.

“These amendments stipulate that 51 percent members of the governing board of cooperative banks should have professional experience, which is practically not possible,” Gehlot said in the statement.

He said the Rajasthan Cooperative Societies Act, 2001 empowers the Cooperative Societies registrar to dissolve the Board of Directors if it is found wanting in discharging its duties stipulated by the office bearers of the cooperative bodies.

The 2001 Act also empowers the Registrar to dissolve the governing board on the recommendation of Reserve Bank of India in case of financial irregularities in cooperative banks.

“But after the amendment, all these rights have been given to the RBI,” said Gehlot, adding that due to the changed system, cooperative department of the state government will not be able to effectively control the cooperative banks.

Gehlot wrote that many amendments to the law are contrary to the “basic principles of cooperatives”. He urged Prime Minister Modi that given the rural background of members in cooperative banks, the earlier system was in the interest of cooperative banks and the basic spirit of cooperatives.

(Photo Credit: PTI)