The Union government on Wednesday announced to bring 1,540 cooperative banks under Reserve Bank of India (RBI) supervision. These banks will be supervised by the RBI in the same fashion as the scheduled banks, offering protection to depositors and reducing the space for mismanagement.
During Budget 2020, Finance Minister Nirmala Sitharaman had announced that cooperative banks will be brought under the ambit of RBI.
Union Information and Broadcasting Minister Prakash Javadekar in the virtual meeting said that “All urban cooperatives and multistate cooperative banks are being brought under the supervision of the Reserve bank of India. There are 1,540 such banks that hold close to Rs 5 lakh crore worth of deposits from over 8 crore lakh account holders. The move to bring them under the RBI will give depositors the assurance that their savings are safe in these banks”.
The decision was made as several instances of fraud and cheating in banks, mismanagement of loans, came to limelight in recent times resulting in a threat to deposits and stability of the country’s financial system.