The Banking Regulation ( amendment) Ordinance 2020 ,Promulgated By Honorable President Ram Nath Kovind.The ordinance is to amend The Banking Regulation Act, 1949.
- The Banking Regulation (Amendment) Bill ,2020 Has Been introduced in the House of the people on the 3rd march, 2020.
- Comes under Legislative Department
- The president promulgate the following Ordinance Under the power conferred by clause 1 of article 123 of the Constitution.
Why it Has Been Done?
- Amendment of section 3 of The Banking Regulations,1949 to ensure better management & Sound regulation of Cooperative banks
- Facilitates making of reconstruction/amalgamation Scheme in the interest of public/depositors/banking/proper banking company management.
- Ensure the safety of depositors across banks.
Effects of Ordinance
- Will Protect the interests of depositors and strengthen cooperative banks by improving governance and oversight by extending powers already available with RBI in respect of other banks to co-operative Banks as well for sound blanking regulation,and be ensuring professionalism and enabling their access to capital.
- Ordinance also amends Section 45 of the banking regulation act, to enable making of a scheme of reconstruction or amalgamation of a banking company for protecting the interest of the public ,depositors and the banking company system and for securing its proper management , even without making an order of moratorium, so as to avoid disruption of the financial system.
1.In the marginal heading , For the word “reconstitution” , the word ” reconstruction shall be substituted.
2.In the sub-section 3 , After the words ” other creditors” the words “or grant any loans or advances or makes investments in any credit instruments” shall be inserted.
3.In sub-section 4, after the words “During the period of moratorium “, the words ” or at any other tiome” shall be inserted.
- Ordinance also amends Section 56.
Power to exempt Ordinance In certain case
- The Ordinance do not effect existing power of state registrars of co-operative societies under state co-operative laws.
- The amendments do not apply to primary Agricultural Credit Societies(PACS) or Co- operative societies whose primary object and principal business is long-term finance for Agricultural development and which do not use the word “bank” or “banker”or “banking” and do not act as drawees of cheques.
SOURCE:- E Gazette of india
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