InvestorQ : Is it true that the RBI will now closely monitor the functioning and operation of cooperative banks in India?
indhumathi Sayani made post

Is it true that the RBI will now closely monitor the functioning and operation of cooperative banks in India?

Answer
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shrinidhi Rajan answered.
7 months ago


Yes that is correct and the Union Cabinet has passed an amendment to the Banking Regulation Act which allows the RBI to exercise much greater control over the cooperative banks. This was necessitated by the failure of PMC Bank and another South Bank. Under the new rules, nearly 1500 cooperative banks will brought under the ambit of RBI regulation. RBI will have the powers to supersede and take control of cooperative banks if health deteriorates. Such banks will need RBI approval before appointing the CEO and all audits of such cooperative banks will be done as per RBI guidelines. This is a good move and will make cooperative banks safer and increase public trust in them.