Why in news?
- The Union Cabinet approved an amendment to the Banking Regulation Act to bring multi-state cooperative banks under the watch of the central bank and prevent a repeat of Punjab and Maharashtra Cooperative Bank-like crisis
- There are 1,540 cooperative banks with a depositor base of 8.60 crore having total savings of about Rs 5 lakh crore. The proposed law seeks to enforce banking regulation guidelines of the RBI in cooperative banks, while administrative issues will still be guided by Registrar of Cooperatives
- Would be audited according to RBI rules and appointment of CEOs would require prior approval from the central bank