Over 1,500 Cooperative Banks Holding Deposits Worth Rs 5 Lakh Crore Brought Under RBI Supervision

The central government on Wednesday (24 June) brought 1,540 cooperative banks, with deposits worth nearly Rs 5 lakh crore in at least 8 crore accounts, under the supervision of the Reserve Bank of India (RBI), Hindustan Times reported.

The banks will now be monitored by the central bank like the other scheduled banks. The RBI's intervention will extend protection to depositors and ensure less scope for mismanagement.

"All urban cooperatives and multi-state cooperative banks are being brought under the supervision of the Reserve bank of India. There are 1,540 such banks that hold close to Rs 5 lakh crore worth of deposits from over 8 crore account holders. The move to bring them under the RBI will give depositors the assurance that their savings are safe in these banks," Union Minister Prakash Javadekar said while informing that the government had approved the decision.

Union Finance Minister Nirmala Sitharaman, earlier in February this year, had made public the intentions of the central government about the same. She said the changes will be done by amending the Banking Regulation Act.

The centre on Wednesday issued an ordinance for the amendment, Javadekar told.

Among many other activities, RBI's approval will also be required to appoint CEOs in such cooperative banks.

The decision has been taken in order to increase the accountability of the banks that keep public money and to prevent the instances of fraud, corruption, and mismanagement.