The Kerala High Court recently asked the Centre and the RBI on a writ petition challenging the amendments to the Banking Regulation Act which have brought the urban cooperative banks under the direct supervision of the RBI, reports Hindu.
The petition was filed by Thiruvalla East Cooperative Bank and Guruvayur Cooperative Urban Bank.
The petition said the urban cooperative banks were now forced to constitute a board of management and appoint a CEO/managing director which would function as a parallel power centre along with the board of directors elected by the general body of the cooperative societies.
The petition also said the amendments mean cooperative societies could not amend their bylaws without the permission of the RBI.