In a crucial decision, the government on Wednesday, June 24, announced that all cooperative and multi-state cooperative banks will be brought under the supervision of Reserve Bank of India (RBI).

The move is aimed at giving comfort to depositors, Union Minister Prakash Javadekar said, adding that it it applicable on as many as 1,540 such banks.

The decision comes months after a massive scam hit the Punjab and Maharashtra Cooperative (PMC) Bank last year, leaving lakhs of depositors helpless and losing their life long savings. Many people were left in deplorable condition looking for ways to access their rightful money.

‘Depositor will be assured his money is safe,’ Javadekar said, adding that an ordinance will be brought to ensure the same.

‘RBI’s powers as they apply to scheduled banks will apply for cooperative banks as well,’ he said.

India has nearly 1,482 urban cooperative banks and 58 multi-state co-operative banks with a depositors base of approximately 8.60 crore.

‘The decision to bring 1,540 cooperative banks under RBI”s supervision will give an assurance to more than 8.6 crore depositors in these banks that their money amounting to Rs 4.84 lakh crore will stay safe,’ the minister added.

Following the PMC Bank crisis, the Union Cabinet had amended Banking Regulation Act to strengthen the cooperative banks in the country in February. The amendment sought to enforce banking regulation guidelines of the central bank in cooperative banks.

Also Read: [Video] Unable To Withdraw Money, PMC Bank Depositor Breaks Down Inconsolably Outside Branch