Cooperative banks to be brought under RBI supervision

The Union Cabinet approved inclusion of co-operative banks under supervisory powers of the Reserve Bank of India, while announcing a Rs 1,542 crore year-long interest subvention scheme for micro loan borrowers.

Among a number of decisions taken by the Cabinet on Wednesday, the government decided to put government banks, including 1,482 urban cooperative banks and 58 multi-state cooperative banks, under the supervisory powers of RBI, through an ordinance.

RBI’s powers on scheduled banks will be hence applicable on co-operative banks as well.

“The decision to bring 1,540 cooperative banks under RBI’s supervision will give an assurance to more than 8.6 crore depositors in these banks that their money amounting to Rs 4.84 lakh crore will stay safe,” Union minister Prakash Javdekar said.

The banks will come under RBI supervision with immediate effect from date of President’s approval on the ordinance.

The Cabinet also approved a scheme for interest subvention of 2% to Shishu loan category borrowers – incomes up to Rs 50,000 – under Pradhan Mantri Mudra Yojana, which were outstanding as on March 31, 2020, for a period of 12 months to eligible borrowers. As on 31st March 2020, about 9.37 crore loan accounts with a total loan amount of about Rs 1.62 lakh crore, were outstanding.

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