Bill introduced in Lok Sabha to strengthen cooperative banks

A Bill that seeks to improve governance and regulation of cooperative banks was introduced in Lok Sabha on Tuesday amid ruckus in the House over opposition demand for an immediate discussion on Delhi violence.

The Banking Regulation (Amendment) Bill 2020 was introduced by Finance Minister Nirmala Sitharaman.

The Bill seeks to strengthen the cooperative banks to prevent a crisis like that faced by PMC banks due to financial irregularities which caused distress to depositors.

It seeks to strengthen cooperative banks by increasing professionalism, enabling access to capital, improving governance and "ensuring sound banking" through Reserve Bank of India.

Sitharaman had said in her budget speech that the government would amend the Banking Regulation Act.

"To strengthen cooperative banks, amendments to the Banking Regulation Act are proposed for increasing professionalism, enabling access to capital and improving governance and oversight for sound banking through the RBI," she had said.

The minister had also said in her budget speech that Deposit Insurance and Credit Guarantee Corporation (DICGC) has been permitted to increase deposit insurance coverage for a depositor from rupees one lakh to Rs 5 lakh per depositor.