Amid ruckus in Lok Sabha on Tuesday, Union Finance Minister Nirmala Sitharaman tabled the banking amendment bill, aimed at bringing the co-op banking system under RBI control.
Reacting to the tabling of bill Satish Marathe, Sahakar Bharati leader and RBI Director said “It will fall short of the expectations of Sahakar Bharati if it covers only those UCBs registered under Multi State Co-op Societies Act.
The full content of the bill has not been made public at any of the govt sites and Marathe was reacting on the basis of whatever has come in media.
Referring to the PMC episode, the Minister said it is a shame if the members are not concerned about the sufferings of small depositors who are hit the most due to scams like the one in the PMC Bank.
The proposed amendments in the Bill oblige Cooperative Banks to fulfill regulatory requirements set for scheduled commercial banks. It is estimated that there are 1,540 co-operative banks with a 86 million strong depositor base having total savings of about Rs 5 lakh crore.
The move will ensure greater accountability and transparency in the functioning of Cooperative Banks and episodes like the one that took place in the PMC Bank would be checked. The Minister referred to the PMC episode several times in her speech.
The amendments relate to giving absolute control to the RBI, though the amendments would not do away with the role of Central Registrar. The latter would still be responsible for their registration, etc.
Most importantly, the RBI would decide on the Panel of auditors for a UCB. Such panels would obviously be different for different categories of banks, depending on the size and business.
The PMC Bank episode is said to have galvanized the govt into action. The Bill also talks of enabling access to capital for the co-op banking sector, a demand being made by the leaders for a long time.