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RBI can frame revival plan for all banks without imposing moratorium

The RBI has to impose restrictions on lending and withdrawal activities before it can frame a revival scheme for commercial and co-operative banks, according to the previous law

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The Ordinance also empowers the RBI to frame an enforceable reconstruction scheme for co-operative banks, just like it does in the case of commercial banks (like YES Bank)

Somesh Jha New Delhi

3 min read Last Updated : Jun 27 2020 | 11:14 PM IST

President Ram Nath Kovind on Friday promulgated an Ordinance to give the Reserve Bank of India (RBI) more supervisory powers over urban and multi-state co-operative banks.

Apart from the regulatory changes related to co-operative banks, one of the key changes the Ordinance makes in the existing law, the Banking Regulation Act, 1949, is to allow the RBI to frame a reconstruction or amalgamation scheme for all banks “even without making an order of moratorium, so as to avoid disruption of the financial system”, a press statement issued by the finance ministry on Saturday said.

The RBI has to impose restrictions

Topics : Reserve Bank of India Banks Co-operative Bank Banking Regulation Act President Ram Nath Kovind YES Bank PMC Bank

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