New Delhi: The Lok Sabha on Wednesday passed an amendment to the Banking Regulation Act to bring cooperative banks under the supervision of the RBI.

The decision made to control huge interest on loans and to protect the interest of depositors,

The Banking Regulation (Amendment) Bill, 2020 replaces an ordinance that was issued on June 26.

Replying to the debate on the bill, Finance Minister Nirmala Sitharaman said this legislation is for depositors’ safety and not for undermining powers of the Registrar of Cooperative Societies.

Powers of the Registrar of Cooperative Societies have not been encroached upon but banking activity of cooperatives will be regulated by the Reserve Bank of India (RBI), she said.

Urban cooperative banks and multi-state cooperative banks will be brought under the RBI’s supervision process applicable to commercial banks.

There are about 1,482 urban cooperative banks and 58 multi-state co-operative banks with a depositors base of about 8.6 crore.