Banking Regulation (Amendment) Bill after the PMB crisis?

Banking Regulation (Amendment) Bill after the PMB crisis?

The PMB crisis could be the seed of the amendment to Banking Regulation Bill. Punjab and Maharashtra Cooperative Bank (PMC Bank) has been confronting administrative activities and investigation over supposed abnormalities in some credit accounts. Advances given to land player HDIL were the main point of the examination. 

The crisis at PMC Bank became visible on September 24, 2019, the day the RBI put checks on the exercises of the Mumbai-based bank for a half year. The bank likewise restricted the sum a client could withdraw from their account during the period.

Considering the crumbling state of Co-operative banks in the nation due to current pandemic crises, Lok Sabha on Wednesday passed the Banking Regulation (Amendment) Bill, 2020. The Bill proposes changes to the Banking Regulation Act, 1949. With this new Bill, the government means to bring co-operative banks under the RBI regulation. 

With the corrections, RBI will be capable of undertaking scheme for amalgamation of a co-operative bank without placing it under restrictions. Before this revision, it not only restricted the withdrawals by depositors, but also stopped a bank’s lending operations. However, the changes will not affect the existing powers of the state registrars of co-operative societies under state laws.

This Bill correction isn't for government to assume control over the co-operative banks. It will help the co-operative banks in the long term and also protect the depositor's interest.