16 November, 2019
4 Min Read
Syllabus subtopic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
News: The government will, in the upcoming Winter Session of Parliament, seek to make amendments in certain laws so as to bring the banking activities carried out by cooperative societies under the purview of the Banking Regulation Act.
Prelims focus: About Cooperative banks and regulations imposed.
Mains focus: The issue of dual regulation and its redressal
About co-operative banks?
Co-operative banks are financial entities established on a co-operative basis and belonging to their members. This means that the customers of a co-operative bank are also its owners.
These banks provide a wide range of regular banking and financial services. However, there are some points where they differ from other banks.
In India, co-operative banks are registered under the States Cooperative Societies Act. They also come under the regulatory ambit of the Reserve Bank of India (RBI) under two laws, namely, the Banking Regulations Act, 1949, and the Banking Laws (Co-operative Societies) Act, 1955.
They were brought under the RBI’s watch in 1966, a move which brought the problem of dual regulation along with it.
Dual Regulation of Urban Cooperative Bank (UCB):
Urban Co-operative Banks are regulated and supervised by State Registrars of Co-operative Societies (RCS) in case of single-State co-operative banks and Central Registrar of Co-operative Societies (CRCS) in case of multi-State co-operative banks and by the RBI.
Source: The Hindu
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