Union Minister Prakash Javadekar in a media briefing about the cabinet decisions announced approval an Ordinance to bring urban cooperative banks and multi-state cooperative banks under the supervision of Reserve Bank of India.
The decision assumes relevance in the backdrop of the Punjab and Maharashtra scam, affecting lakhs of depositors.In April, a Constitution Bench of the Supreme Court had held that banks must comply with the provisions of the Banking Regulation Act with respect to their operations. The SC also held that SARFAESI Act was applicable to cooperative banks.
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The minister stated,
“It will give an assurance to 8.6 crore depositors in these banks that their money will stay safe”.