ANI reports that Union Finance Minister Nirmala Sitharaman is likely to move the Banking Regulation (Amendment) Bill, 2020 for consideration and passage in Lok Sabha on Thursday(today).
The Banking Regulation (Amendment) Bill 2020, a Bill to further amend the Banking Regulation Act, 1949.
Keeping in view the developments in the banking sector and regulation thereof overtime, it has become necessary to strengthen the provisions of the said Act as applicable to co-operative banks, felt the Finance Minister.
The Bill proposes to bring the co-operative banks on par with the developments in the banking sector through better management and proper regulation of co-operative banks with a view to ensure that the affairs of the co-operative banks are conducted in a manner that protects the interests of the depositors.
The proposed amendments in the Banking Regulation Act, 1949 related to the followings
(i) to amend section 3, so as to make the provisions of the said Act not applicable to—
(a) a primary agricultural credit society; or
(b) a co-operative society whose primary object and principal business is providing of long-term finance for agricultural development, if such society does not use as part of its name, or in connection with its business, the words “bank”, “banker” or “banking” and does not act as drawee of cheques;
(ii) to substitute clause (i) of section 56, so as to provide for the issue and regulation of paid-up share capital and securities by co-operative banks;
(iii) to amend clause (zaa) of section 56, so as to provide that in the case of a co-operative bank registered with the Registrar of Co-operative Societies of a State, the Reserve Bank shall consult the concerned State Government before issuing order for supersession of the board of directors under section 36AAA;
(iv) to omit certain clauses of section 56 as the other provisions of the Banking Regulation Act, 1949 would apply to co-operative banks;
(v) to make other consequential changes in section 56.
The Bill seeks to strengthen the co-operative banks by increasing professionalism, enabling access to capital, improving governance and ensuring sound banking through the Reserve Bank of India.