RBI SHOULD BE GIVEN FULL POWER TO REGULATE CO-OP BANKS: MARATHE

RBI Central Board Director Satish Marathe has asked the government to give full powers to the Reserve Bank of India to regulate all urban cooperative banks in the wake of lakhs of depositors facing hardship in withdrawing their entire sum from scam-hit PMC Bank.

In a letter to Finance Minister Nirmala Sitharaman, Marathe also suggested that a broad-based committee should be set up to prepare a vision document and a road map for the cooperative banking sector. He also said the committee should constitute officials from the Reserve

Bank of India (RBI), finance ministry, agriculture ministry, and at least two eminent co-operators.

Marathe also raised these issues during his recent meeting with Sitharaman.

"Amend the Banking Regulation Act to provide full regulatory powers to the RBI to regulate all urban co-op banks viz. all scheduled and non-scheduled, irrespective of their being registered under respective state co-op Act or the multi-state co-op societies Act," said his letter to the minister.

He added that simply amending the Multi State Cooperative Societies Act will not be enough.

On Friday, Sitharaman told reporters that the government would bring a legislation to effectively regulate cooperative banks so that they also follow prudential norms applicable for commercial banks.

He further said the government should find "outof-box" solution to redress the hardships being faced by all categories of depositors and the cooperative sector.