In order to deal with banking frauds, Indian government has decided to bring all cooperative banks under the banking regulator, the Reserve Bank of India (RBI). The Indian cabinet approved the promulgation of an ordinance for the same on Wednesday.
Reacting to the Cabinet decision, Indian Finance Minister Nirmala Sitharaman said in a tweet that "the decision will safeguard the interests of depositors.”
In a major decision towards better management and sound regulation of cooperative banks and to safeguard the interest of depositors, the union cabinet today decided to bring cooperative banks under the supervision of the Reserve Bank of India, through an ordinance. pic.twitter.com/ErJYDOzEJI
— NSitharamanOffice (@nsitharamanoffc) June 24, 2020
To date, only the commercial banks were only liable to be regulated by the Indian banking regulator. The co-operative banks were regulated by the respective state governments where they were located.
The ordinance cleared by the Indian cabinet will bring all the co-operative banks under the regulation of RBI.
