The State Government will approach the Supreme Court against the regulations imposed on cooperative bodies by the Reserve Bank of India (RBI), Minister for Cooperation V.N. Vasavan has said.
The Government had opposed the recent circular issued by the RBI cautioning public against cooperative societies that used the words ‘bank’, ‘banker’ or ‘banking’ as part of their names. The central bank had also noted that some cooperative societies were accepting deposits from non-members/ nominal members/ associate members, which is tantamount to conducting banking business in violation of the Banking Regulation Act.
Mr. Vasavan said here on Saturday that the Government would write to the RBI explaining the special role and relevance of cooperative societies in the State. “The RBI's guidelines will adversely affect the interests of the State,” he said.
The Minister said the Government would seek the support of other States that would be affected owing to the guidelines on cooperative societies issued by the RBI. “We will hold consultations with the Ministers of Cooperation in these States, besides sharing the State’s concerns with the Centre,” he said.
The Government raised its opposition against the central bank after it issued an advisory to the members of the public stating that cooperative societies had neither been issued any licence under Banking Regulation Act, 1949, nor were they authorised for doing banking business. Further, insurance cover from the Deposit Insurance and Credit Guarantee Corporation was also not available for deposits placed with these societies, it said.
