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Banking Regulation (Amendment) Ordinance 2020 promulgated by President

Banking Regulation (Amendment) Ordinance 2020 promulgated by President

The Banking Regulation (Amendment) Ordinance, 2020 has been promulgated by President Ram Nath Kovind in an effort to commit and ensure the safety of depositors throughout the various banks.

Key Points:

  • The Banking Regulation (Amendment) Ordinance, 2020 makes an amendment to the Banking Regulation Act, 1949, which is applicable to the co-operative banks.
  • The new amendment is focused on the protection of depositors and strengthening the co-operative banks by enhancing governance and oversight. This will be done by extending already available powers of RBI with respect to other banks to Co-operative Banks.
  • The existing powers of the State Registrars of Co-operative Societies which fall under state co-operative laws are not affected by the amendments.
  • The amendments are not applicable to Primary Agricultural Credit Societies or co-operative societies whose main objective and business is financing agricultural development in the long-term.
  • Under the ordinance Section, 45 of the Banking Regulation Act is also amended to facilitate the making of a scheme of reconstruction or amalgamation of a banking company.
  • The banking company will protect the interest of the depositors, public and the banking system and will help in securing its proper management, without ordering a moratorium, which will help in avoiding disruption of the financial system.

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