Raj CM asks PM to amend provisions of banking regulation act

Updated: Oct 20,2020 22:27 GMT

social social social social Raj CM asks PM to amend provisions of banking regulation act

IANS

Tags: National
Jaipur, Oct 21 (IANS) Rajasthan Chief Minister Ashok Gehlot wrote a letter to Prime Minister Narendra Modi mentioning that the amendments made in the provisions of the Banking Regulation (BR) Act will adversely affect the basic spirit of the Cooperative Banks and the Cooperative movement in the states. He requested the PM to reconsider the said amendments and restore the earlier system.

Gehlot in his letter wrote that recently, the BR Act was amended to make Sections 10 and 10A of the Act operational for the Cooperative banks by passing a bill in the Parliament. It has been made compulsory for 51 per cent members of the Board of Directors of Cooperative Banks to have professional experience. This condition is not practical, he wrote.

The CM further wrote that in the new regime, allocation of shareholding and the right to issue shares and securities by the shareholders of the Cooperative Banks would be determined by the Reserve Bank of India (RBI) under Section 12 of the Act. This provision of keeping the Cooperative banks at par with the commercial banks, is contrary to the basic principle of the Cooperative that is 'One Person - One Vote'.

Rajasthan CM further stated that in the situation of the office-bearers of the Cooperative Society having dereliction in duties or maintenance of standards, the Registrar, Cooperative Societies vested the rights to dissolve the Board of Directors of the concerned Cooperative bank under various provisions of the Rajasthan Cooperative Societies Act, 2001. Also, on finding any financial irregularity by a cooperative bank, there is a provision for the Registrar, Cooperative Societies to dissolve the Board of Directors on recommendation of the RBI. But, through the said amendments in the BR Act, all such rights have been vested with the RBI. In the new system, the Cooperatives Department of the state government will have no effective control on the Cooperative Banks.

The CM wrote that such amendments were against the basic principles of the very idea of cooperatives. He requested the Prime Minister that in view of the rural background of the members of Cooperative Banks, the earlier system of shareholding and monitoring and regulation of these banks be restored. Also, the mandatory provision for professional experience of the Cooperative members and other such amendments should be reconsidered in the interest of the basic spirit of Cooperative Banking.

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