Deepali Kalia –
A day after the Maharashtra government constituted a 13 member committee headed by Cooperation Minister Balasaheb Patil in order to examine the impact of the amendment to the Banking Regulation Act on urban co-operative banks in the state, the panel in the very first meeting decided to challenge the amendment in Court.
“We fear the urban cooperative banking sector will collapse following the amendment to the Banking Regulation Act. We have decided to challenge it in court. Whether to move the high court or Supreme Court will be decided after seeking legal opinion of the advocate general.” Balasaheb Patil stated.
Nationalist Congress Party (NCP) President Sharad Pawar 2 weeks ago asked also the State government to study the impact of the amendment on urban cooperative banks in the State.
As per the presentation given by MSC Bank administrator Vidyadhar Anaskar in the meeting which was also attended by Revenue Minister Balasaheb Thorat, Minister of State Vishwajeet Kadam, Development Minister Hasan Mushrif, Banking Expert Vishwas Thakur, the amendment renders huge powers to the Reserve Bank of India (RBI) for regulating urban cooperative banks, which have been under the indirect and direct control of the NCP and Congress.
The eligibility of 50 % of the directors will be decided by the RBI and the director’s tenure will not be beyond 8 years.
The amendment also states that directors who will not conform to RBI norms will be removed and once removed will not be eligible for appointment in any capacity in any of the banks.
The appointment of the new Chairman will also require RBI’s permission.
Most of the members contended that to be able to interfere in the non-banking activities of urban cooperative banks went beyond RBI’s jurisdiction.
“If we are changing the location of the bank ,why should the RBI examine our decision”, a senior cabinet member stated.
“Our co-operative banks are the backbone of the rural economy, now the RBI aims at destroying it. We will oppose the amendment”, Revenue Minister Balasaheb Thorat stated.