The Narendra Modi govt has demolished yet another Nehruvian relic. In a swift move by way of an ordinance, government banks, 1,482 urban cooperative banks, and 58 multi-state cooperative banks are now being brought under the supervisory powers of the Reserve Bank of India (RBI). The decision by the government to augment RBI’s supervisory powers over the urban and multi-state co-operative banks comes after Finance Minister Nirmala Sitharaman had announced the government’s intentions of bringing the co-operative banks under the RBI’s supervision in Budget 2020. The ordinance to this effect could not be passed in the Budget session of the parliament.
RBI’s supervision will apply to the cooperative banks like they apply to the scheduled commercial banks. The decision to bring 1,540 cooperative banks under RBI’s supervision will provide 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.
