AMN
Parliament has passed the Banking Regulation (Amendment) Bill, 2020 with the Rajya Sabha passing it today. The Bill amends the Banking Regulation Act, 1949 which regulates the functioning of banks and provides details on various aspects such as licensing, management and operations of banks.
It will replace the Banking Regulation (Amendment) Ordinance which was promulgated in June this year. The Bill allows Reserve Bank of India to initiate a scheme for reconstruction or amalgamation without imposing a moratorium. If a moratorium is imposed in addition to the existing restrictions, the banks cannot grant any loans or make investments in any credit instruments during the moratorium.
Reply to a discussion on the Bill, Finance Minister, Nirmala Sitharaman said that this Bill is important as so many cooperative banks have faced serious difficulties in the recent past. She said, amendments have been made to completely protect the interest of the depositors ensuring to abolish the difficulties faced by the cooperative banks in their functioning. The Minister said that cooperative societies’ other activities will not be impacted by these amendments and these are only related to the banking operation of these societies.
Participating in the discussion, Amar Patnaik of BJD said that significant provisions have been made in the Bill. However, he suggested that actual supervision should be improved and lending pattern of the banks should be reviewed from time to time. RCP Singh of JD (U) said that it will ensure the robust surveillance mechanism which will check the scams in the cooperative banks and improve the trust of the people.
K. Ravindra Kumar of TDP said, the Bill has far reaching impact on the cooperative banks and it will encourage the lending by them. Terming the Bill as the right step, Vijayasai Reddy said that it will improve the balance sheets of the cooperative banks. Ashwini Vaishnav of BJP said that this Bill has the human approach as it will promote the tendency of saving.