Big decision by Modi government! Cooperative banks to be brought under RBI supervision

In a major development, the Modi government on Wednesday said all cooperative banks and multi-state cooperative banks will come under the supervision of the Reserve Bank of India (RBI). The decision has been taken with an aim to provide comfort to depositors of these banks.  Information and Broadcasting Minister Prakash Javadekar said while briefing media about the Cabinet decisions said, "Urban cooperative banks and multi-state cooperative banks will be brought under the RBI supervision process applicable to commercial banks. He added, "Depositor will be assured his money is safe. He said an ordinance in this regard will be promulgated.

There are about 1,482 urban cooperative banks and 58 multi-state co-operative banks with a depositors base of about 8.6 crore.

The decision assumes significance amid lakhs of depositors facing problems after a scam in the multi-state Punjab and Maharashtra Cooperative Banks.

WATCH FULL VIDEO: Cabinet Briefing by Union Ministers Prakash Javadekar, Giriraj Singh and Jitendra Singh

Earlier, the Cabinet had approved amendment to Banking Regulation Act to strengthen cooperative banks and avoid PMC Bank like crisis.

Moreover, Union Cabinet, chaired by PM Narendra Modi has approved a scheme for interest subvention of 2% to Shishu loan category borrowers under Pradhan Mantri Mudra Yojana (PMMY), outstanding as on 31st March, 2020, for a period of 12 months to eligible borrowers.

Further, Union Cabinet, chaired by PM Narendra Modi approved additional investment  by ONGC Videsh Ltd. for development of blocks A-1 and A-3 Blocks of Myanmar.

Also, Union Cabinet Prime Minister Narendra Modi approved far reaching reforms in the Space sector aimed at boosting private sector participation in the entire range of space activities. The decision taken is in line with the long-term vision of the Prime Minister of transforming India and making the country self-reliant and technologically advanced.