Find out how the new law for co-operative banks will benefit account holders

New Delhi, 26 June 2020 Friday

Following the signature of President Ram Nath Kovind on the Central Government Ordinance, 1540 Co-operative Banks and Multi-State Co-operative Banks have now come under the purview of the Reserve Bank. After this new rule of Modi government, the deposits of 86 million account holders will be safe.

All these banks have come under the supervision of the Reserve Bank. All these banking rules will apply to co-operative banks. Let us know what effect this order of the government will have on the customers of the bank ...

After coming under the control of the Reserve Bank, these banks will also have to abide by RBI rules, which will make it easier for the country's monetary policy to succeed.

These banks will also have to deposit some of their capital with the central bank. In this case, they are less likely to sink. In addition, the Reserve Bank will decide for which sector the money of the co-operative banks should be allocated.

If a bank defaults now, it is safe to deposit up to Rs 5 lakh in the bank. If the bank goes bankrupt or goes bankrupt, the depositors will get a maximum of Rs 5 lakh regardless of the amount in their account.

If you have an account in multiple branches of the same bank, then the amount of money and interest deposited in all the accounts will be added and only a deposit of up to Rs 5 lakh will be considered safe.

What is a co-operative bank?

As per the State Co-operative Societies Act, co-operative banks providing agricultural and credit facilities are set up in rural areas. They are registered with the Registrar of Co-operative Societies.

Primary co-operative credit committees are set up in villages, towns or cities which provide loans to farmers, artisans, laborers or shopkeepers through co-operative banks. There are also District Cooperative Bank, State Cooperative Bank and Land Development Bank.