Bill to bring co-op banks under RBI purview gets nod; Oppn says ‘brazen assault’

Slamming the government for passing the Bills in the absence of several opposition parties, TMC leader of the House Derek O’Brien tweeted, “#CheatIndia 7 Bills passed in RS in 3.5 hrs today! I had moved resolutions against 2 Ordinances plus a motion to send Essential Commodities Bill to Select Committee. Also amendments to Banking Regulation Bill. All 4 cancelled. Suspend us. Then pass Bills.”

CPI(M) general secretary Sitaram Yechury tweeted: “The entire Opposition is boycotting in protest against NO discussion, NO division of vote & legislating in the din. Now legislating in a House bereft of any opposition. Brazen destruction of Indian parliament. This assault will be resisted and defeated.”

The banking Bill seeks to protect depositors of cooperative banks and empower Reserve Bank of India (RBI) to regulate banking activities of cooperative societies. Lok Sabha had approved it last week.

Several opposition parties had earlier opposed the Bill and raised concerns that it will infringe upon the rights of states and undermine India’s federal structure.

Finance Minister Nirmala Sitharaman said the Bill is aimed at governing the activities of only those cooperative societies that function as banks. “Changes being introduced through the Bill are required to protect the interest of depositors,” she said, adding that it seeks to extend certain commercial bank rules to cooperative societies that function as banks.

The Bill also empowers the RBI to effectively handle mishaps in private banks without any loss of public confidence or disruption to the financial system, she said. The RBI can restructure the banking companies even without a moratorium being allowed, the Bill proposes.

Sitharaman said, “…when Yes Bank faced difficulties, the problem was solved in two weeks because the rules of commercial banks was extended. However, in the case of Punjab and Maharashtra Cooperative (PMC) Bank, the problem exists till date.”

Amar Patnaik (BJD) asked how RBI will monitor cooperatives, and if it had the manpower to do so.