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| Section 56 of the Banking Regulation Act, 1949, which governs all co-operative banks, has also proposed to be deleted. |
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| The changes have been suggested in the Banking Regulation (Amendment) Bill 2003, which was introduced in the last monsoon session of the Parliament. |
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| The Bill, which has been sent to a select committee of Parliament, will affect the nearly 2,090 urban co-operative banks and all the district and rural co-operative banks in the country. |
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| For co-operative banks, the most critical provisions of the Bill relate to the appointment of directors and chairmen. |
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| The Bill says that not less than 51 per cent of the directors should be persons having specialised knowledge or practical experience in accountancy, banking, finance, science & technology, economic affairs, small scale industry and agriculture. The remaining 49 per cent can be inducted as per existing norms. |
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| The problem is that the 49 per cent will also include reserved seats. Banks generally have a board of 20 directors. Thus, 11 (51 per cent) will be experts. |
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Of the remaining nine seats, one will be reserved for SC/ ST category, one for OBC category, two for women
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