Thread by @Sanju_Verma_

1482 #UrbanCooperativeBanks&58 multi State Co-op Banks,to come under #RBI control now💪

#PMCBank crisis was partly due to multi-tier regulation,as seen below

Direct Supervision by RBI is a bold move-@narendramodi govt buries yet another jaded,#NehruvianRelic that fed corruption

Cooperative banks came partially under RBI in 1966 but faced problem of multiple regulation

Registrar of Cooperative Societies(RCS)is in control of management elections& administrative issues

Today's #CabinetApproval to bring #CooperativeBanks under #RBI is,therefore historic💪

Despite changes in 1966,in spirit,most #CooperativeBanks, operated as per Cooperative SocietiesAct,1955

#BankNationalisation in 1969,by #IndiraGandhi,compounded the banking-bureaucracy-politico,nexus

It took a @narendramodi,to finally rid #CooperativeBanks,from greedy #Babudom

While,as per Banking Regulation Act,1949,grant of licence,CRR, SLR &Capital Adequacy Ratios,were applicable to #CooperativeBanks much like Scheduled Commercial Banks,in effect,due to stranglehold of #RCS,norms were flouted

@narendramodi govt has changed that,with stroke of a pen

Despite overall compliance, &auditing being under RBI,in case of #CooperativeBanks,multi-tier regulation from say Nabard,in case of Rural Co-op Banks,concerned States&RCS in case of Urban Co-op Banks,meant,no clear line of accountability

Today's #CabinetDecision has changed that

Under direct RBI control,Co-op Banks may be able to borrow from RBI,which is not the case now,often leading to paucity of capital

#PCA,to check #BadLoans,will now apply to Co-op Banks;PCA is triggered,if bad loans are more than minimum threshold or,return on assets is sub par

It is a win-win--#CooperativeBanks will have larger access to capital

Customers will benefit,as direct RBI control will ensure better compliance&customer service

In April2020,10 #PSBs re-wired &became 4;Today's Cabinet decision,will accelerate much needed #BankConsolidation