Will amend laws to better regulate co-op banks: FM
Receives Proposal To Hike Deposit Insurance From 1 Lakh
Mumbai: Finance minister Nirmala Sitharaman, who met protesting depositors of the failed Punjab and Maharashtra Cooperative (PMC) Bank in Mumbai on Thursday, said that the government is considering amending laws for better regulation of cooperative banks. She told reporters that she will speak to RBI governor Shaktikanta Das seeking an early resolution.
Sitharaman said a committee of secretaries of economic affairs & financial services, rural affairs & urban development ministries and a deputy governor of the RBI would be formed. She added that, if necessary, the government will amend the laws governing cooperative banks in the winter session of Parliament.
Sitharaman said that she has received a proposal to increase the extent by which individual deposits were protected by insurance from the current level of Rs 1lakh.
— Nirmala Sitharaman |
She said that the proposal would be placed before the committee. The finance minister was addressing a press conference at the BJP office in Mumbai ahead of the state elections.
The finance minister’s statement comes on the back of RBI governor Shaktikanta Das saying that the central bank is taking a fresh look at the regulatory framework that is in existence and that it will take up any changes if required with the government. “We are in discussion with the government with regard to the regulatory provisions of cooperative banks, which are different from the other scheduled commercial banks,” Das had said.
The PMC Bank failure had thrown up questions about the limitations in cooperative bank supervision. Despite being on the core