Union Cabinet approved amendments to the Banking Regulation Act to bring cooperative banks under the regulatory mechanism of Reserve Bank of India. The government has taken this move in the wake of the Punjab and Maharashtra Co-operative (PMC) Bank crisis.
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The provisions would give Reserve Bank of India (RBI) the power to take control of weak co-operative banks. As per the new proposals, cooperative banks will need to take RBI approval for the appointment of CEO and do audits as per RBI guidelines.
