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‘Will adversely affect...’: Rajasthan opposes RBI getting control of cooperative banks
In a letter to PM Modi, Gehlot asked the PM to reconsider the amendments and restore the previous system wherein the state cooperative departments have regulatory control over cooperative banks.
Rajasthan chief minister Ashok Gehlot has opposed the recent amendments in the Banking Regulation Act (BRA) bringing the cooperative banks under the Reserve Bank of India (RBI). The chief minister said the move would “adversely” affect the basic spirit of the state’s cooperative banks.
In a letter to Prime Minister Narendra Modi, Gehlot asked the PM to reconsider the amendments and restore the previous system wherein the state cooperative departments have regulatory control over cooperative banks.
“The amendments made in some provisions of the Banking Regulation (BR) Act would adversely affect the basic spirit of the state’s Cooperative Banks and Cooperatives,” Gehlot said in an order.
Rajasthan has 29 central cooperative banks which provide banking services across the state and are major contributors for disbursing farm loan.
Gehlot said sections 10 and 10A have been inserted in the recently passed banking amendment law which regulate the cooperative banks. “Through these amendments, 51 percent members of the governing board of cooperative banks should have professional experience, which is practically not possible,” Gehlot stated.
He added that in view of the majority of the members in cooperative banks coming from a rural background, the Centre should restore the earlier system and the condition of professional experience should be eliminated.
He said the amendments overrule the provisions of the Rajasthan Cooperative Societies Act, 2001, which authorises registrar, co-operative societies to dissolve the Board of Directors if there is an error in the duties and norms set by the committee’s officials.
Now, the registrar, co-operative societies can dissolve the board only on the recommendation of the RBI in the case of financial irregularities, he said, adding that it would make the office of registrar cooperative societies redundant.
“After the amendment, all these rights have been given to the RBI. Due to the changed system, cooperative banks will not be able to effectively control the cooperative department of the state government,” the CM said.
Gehlot said many amendments contradict the basic principles of cooperatives and urged the PM to review the amendments.
BJP spokesperson and MLA Ram Lal Sharma said it is a habit of the Congress to oppose any bill introduced by the BJP. They should let it implement and see its result and decided whether it’s in people’s interest or not.
