No violation of any law in bringing cooperative banks under supervisory control
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In an affidavit filed in the Madras High Court today, the RBI has said, the recent legislation enacted in Parliament is aimed at regulating banking.
It further said that the law is aimed at safeguarding the interests of the depositors and the public.
It said, the laws governing the cooperatives vary from state to state and therefore, the banking activities being done by them require a national law.
It further said, the RBI is empowered to regulate any banking activity including those by the cooperative bodies.
It pointed out that 430 urban cooperative banks in the country have lost their banking licenses due to very poor financial positions.
Earlier, two cooperative banks in Tamil Nadu filed the petitions against the Central Government ordinance bringing them under the RBI control. The ordinance has since been replaced by a law.
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