The Reserve Bank of India will soon take full control of the co-operative banks due to the current fraud cases that have been making headlines in the banking sectors. It will soon be developing strict rules and regulations to prevent any of these cases from happening in the future. The banking sectors have been experiencing several backlashes as depositors are losing trust irrespective of the safety of their hard-earned money in the protection of banks. The fraud cases that have been occurring within the banking sectors date back to 2014, which have been left neither investigated. There has been no one rendered accountable for the fraud cases and depositors are now demanding that the RBI take full power over the functionality of the banks in India.
The Reserve Bank of India owning full power over the co-operative banks has been demanded to do so to put an end to these severe cases of fraud. According to sources, the urban co-operative banks have announced over 1000 cases of fraud which were worth over Rs. 220 crores. One of the recent cases that caused a big storm is the Punjab and Maharashtra Co-operative bank fraud that led to several Indian families and households unable to redraw money and as the case still continues, many depositors await a remedial measure and resolution towards the inconvenience caused by the fraud.
There have been changes approved by the Banking Regulation Act (BAC) to grant the Reserve Bank of India authority to make changes in the cooperative lender’s regulations and prevent such frauds as the one observed in the Punjab and Maharashtra co-operative bank. These cases affect the functions of families who trust banks to safeguard their savings, many of whom haven’t received their refund yet. This is a big dent in the banking system regulatory system. The Reserve Bank of India is expected to carry out critical supervisions and also restart new investigations to see the holes in the banking sectors.
The amendment would be cleared by the Parliament and furthermore, the cooperative banks would be audited adequately according to norms of the Reserve Bank of India and the central bank as well. This would be carried out in consultation with the state government and if any cooperative bank is found to be under stress, the RBI would be responding with relief measures. The Reserve Bank of India would also be responsible for appointing the chief executives of every co-operative bank and commercial banks as well.
However, the Cooperative banks in India are now under the authority of the Registrar of Cooperative Societies (RCS) and the Reserve Bank of India. The role of the registrar of cooperative societies includes supervising the incorporation, registration, management, auditing of the board and liquidation process. The Reserve Bank of India is also responsible for regulatory functions such as maintaining capital adequacy and also the cash reserves. The banks are going to be audited according to the Reserve Bank of India guidelines and recruitment of employees for the management of the banks will be based on the qualifications approved by the RBI as well. The RBI is implementing these guidelines in a phased manner to protect the interest of the banking sector and the depositors as well.
Mohit Kamboj is the author of this article. Find more information about Mohit Kamboj.
The Reserve Bank of India owning full power over the co-operative banks has been demanded to do so to put an end to these severe cases of fraud. According to sources, the urban co-operative banks have announced over 1000 cases of fraud which were worth over Rs. 220 crores. One of the recent cases that caused a big storm is the Punjab and Maharashtra Co-operative bank fraud that led to several Indian families and households unable to redraw money and as the case still continues, many depositors await a remedial measure and resolution towards the inconvenience caused by the fraud.
There have been changes approved by the Banking Regulation Act (BAC) to grant the Reserve Bank of India authority to make changes in the cooperative lender’s regulations and prevent such frauds as the one observed in the Punjab and Maharashtra co-operative bank. These cases affect the functions of families who trust banks to safeguard their savings, many of whom haven’t received their refund yet. This is a big dent in the banking system regulatory system. The Reserve Bank of India is expected to carry out critical supervisions and also restart new investigations to see the holes in the banking sectors.
The amendment would be cleared by the Parliament and furthermore, the cooperative banks would be audited adequately according to norms of the Reserve Bank of India and the central bank as well. This would be carried out in consultation with the state government and if any cooperative bank is found to be under stress, the RBI would be responding with relief measures. The Reserve Bank of India would also be responsible for appointing the chief executives of every co-operative bank and commercial banks as well.
However, the Cooperative banks in India are now under the authority of the Registrar of Cooperative Societies (RCS) and the Reserve Bank of India. The role of the registrar of cooperative societies includes supervising the incorporation, registration, management, auditing of the board and liquidation process. The Reserve Bank of India is also responsible for regulatory functions such as maintaining capital adequacy and also the cash reserves. The banks are going to be audited according to the Reserve Bank of India guidelines and recruitment of employees for the management of the banks will be based on the qualifications approved by the RBI as well. The RBI is implementing these guidelines in a phased manner to protect the interest of the banking sector and the depositors as well.
Mohit Kamboj is the author of this article. Find more information about Mohit Kamboj.
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