'This' decision of the Modi Government to increase people's confidence in the co-operative banks
Now, the RBI to save the depositors from the loss after any co-operative bank being defaulter!
SEP 15 (WTN) - Naturally, at this time of the 21st century, you must have an account in one bank. However, it has been observed that the banking sector is at great risk nowadays, especially in the co-operative sector banks. In fact, due to scams in the past few times, people have lost confidence in the system of banks.
In fact, most cases of scams in the banks have been reported in the co-operative banks. Now, since people from rural areas to urban areas are associated with the co-operative banks, these scams in the co-operative banks started shaking the confidence of the people from the co-operative banks. But, in such a situation, now, the Modi Government has taken such a step that the central bank of the country, RBI (Reserve Bank of India) will be able to monitor the functioning of the co-operative banks.
Yes, the way RBI has been regulating all government and private banks so far, now, the RBI will regulate all the co-operative banks in the country in the same way. For your information, let you know that at present, there are 1,482 urban co-operative banks and 58 multi-state co-operative banks in the country. With this new decision of the Modi Government, RBI will now regulate all these 1,540 co-operative banks. Explain that all this work of regulating banks is done by RBI's Subsidiary DICGC (Deposit Insurance and Credit Guarantee Corporation).
Actually, this decision of the Modi Government is in the interest of the customers. Because, now, the co-operative banks will be regulated by the RBI, if any co-operative bank being defaulter, then up to Rs 5 lakh amount of the account holder deposited to that bank will be safe, as yet occurs in government and private banks. In fact, in the budget presented on 1 February 2020, the Finance Minister has increased this amount from Rs 1 lakh to Rs 5 lakh.
According to this rule, if a bank being defaulter, and its depositors have any amount deposited in the bank, but they will only get a maximum of 5 lakh rupees whereas earlier, this amount was only 1 lakh rupees. Let you know that provisions have been made in section 16 (1) of the DICGC Act, 1961. According to these provisions, if a bank defaults, DICGC is liable to pay a maximum of a fixed amount to all depositors of that bank.
But, according to the rules of the DICGC, it also has some rules. For example, if you have accounts in multiple branches of the same bank, and if this bank defaults, then the deposited money, FD, and interest will be added to all the accounts of this bank, and only the maximum amount of Rs 5 lakhs will be secured. At the same time, the DICGC will decide the guidelines for how this amount will be received by the depositor.
Actually, this decision of the Modi Government will once again boost the confidence of the general public towards the co-operative banks, and they will feel that their money is safe in the banks. Now, when the RBI monitors the functioning of the co-operative banks, the general public will gain confidence in the co-operative banks. Now, like public and private banks, co-operative banks will also have to keep some of their capital with RBI. In such a situation, there will be less apprehension of the scams in these banks due to the RBI monitoring.
Not only this, now, the co-operative banks will also have to follow the RBI rules, which will make it easier than ever before to make the monetary policy of the country a success. At the same time, now, since all the banks will be under the supervision of the RBI, the financial condition of the banks should be expected to be fine. It can be said that many benefits of this decision of the Modi Government can be seen in the coming time.