Lok Sabha Question No. 3553 (UNSTARRED), answered on 2021-08-10
Subject: Notices under Section 35A
Ministry: COOPERATION
Asked by: L.S. Tejasvi Surya

## GOVERNMENT OF INDIA MINISTRY OF COOPERATION

## LOK SABHA UNSTARRED QUESTION NO. 3553

## TO BE ANSWERED ON 10 th  AUGUST 2021

## NOTICES UNDER SECTION 35A

## 3553.     SHRI L.S. TEJASVI SURYA

Will the Minister of COOPERATION सहकारता मंी be pleased to state:

- (a) the  number  and  names  of  cooperative  banks  who  have  been  given  a  notice  under Section 35A of the Banking Regulation Act year-wise during the last three years;
- (b) the existing policy framework regarding cooperative banks in the country;
- (c) the  details  about  the  reforms  brought  in  since  2014  to  improve  the  structure  and banking functions of cooperative banks in the country; and
- (d) whether the Government is pondering over any robust improvisations/modifications in the  cooperative  banking  sector  given  their  importance  in  catering  to  banking  needs  at  the grassroots level, and if so, the details thereof?

## ANSWER

## MINISTER OF COOPERATION (SHRI AMIT SHAH)

## सहकारता मंी

- (a):      Since  January  1,  2019,  23  Urban  Co-operative  Banks  have  been  placed  under Directions  under  Section  35A  read  with  Section  56  of  the  Banking  Regulation  Act,  1949. Year-wise data is furnished in the Annexure 1. However, no such notice under Section 35A of the Banking Regulation Act, 1949, as applicable to Cooperative Societies (AACS) has been given to any State Co-operative Bank (StCB)/ District Co-operative Bank (DCCB) in the last three years.
- (b):        State  Co-operative  Banks/ District Central Co-operative Banks are regulated by RBI under  the  provisions  of  the  Banking  Regulation  Act,  1949  (AACS).  Further,  as  the  cooperative  banks  are  incorporated  as  co-operative  societies,  the  related  matters  are  being regulated by the state/ central governments to that extent. State Co-operative Banks/District Central  Co-operative  Banks  are  being  periodically  inspected  by  NABARD  under  the provisions  of  Section  35  (6)  of  the  Banking  Regulation  Act,  1949  (AACS).  RBI  issues instructions,  circulars,  guidelines  and  notifications  to  State  Co-operative  Banks  and  District Central  Co-operative  Banks  under  the  provisions  of  the  Banking  Regulation  Act,  1949 (AACS).

(c) & (d): Following are the details about the reforms brought in since 2014 to improve the structure and banking functions of cooperative banks in the country:

1.  A roadmap was provided to co-operative banks for achieving a minimum Capital to Risk Weighted Assets (CRAR) of 7 per cent on an on-going basis by March 31, 2015 and 9 per cent by March 31, 2017. Further, StCBs/ DCCBs were permitted to  issue  Long  Term  (Subordinated)  Deposits  (LTD)  and  Innovative  Perpetual Debt Instruments (IPDI) subject to conditions.
2.  Pursuant to the amendments to the B.R. Act, 1949 (AACS), CRR and Statutory Liquidity  Ratio  (SLR)  for  all  cooperative  banks  were  brought  on  par  with scheduled commercial banks in 2014.
3.  StCBs and DCCBs were allowed to shift their Statutory Liquidity Ratio (SLR) term deposits to approved securities in phases by 2017.
4.  The Banking Regulation (Amendment) Act, 2020 (39 of 2020) was notified for the State  Co-operative  Banks  (StCBs)  and  District  Central  Co-operative  Banks (DCCBs) with  effect  from,  April  1,  2021.  The  amendment  seeks  to  protect  the interests of depositors and strengthen co-operative banks by improving governance and oversight.

## Annexure-I

## List of Co-operative Banks placed under Directions under  Section 35A read with Section 56 of the Banking Regulation Act,1949

| Year                       |   Number of UCBs | Name of the UCBs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----------------------------|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2019                       |               15 |  Sri Bharathi Co-operative Urban Bank Ltd, Hyderabad  The Youth Development Co-operative Bank Ltd, Kolhapur  Bhagyodaya Friends Urban Co-operative Bank Ltd, Warud, Amravati  Dr. Shivajirao Patil Nilangekar Urban Co- operative Bank Ltd, Nilanga  BidarMahila Urban Co-operative Bank Ltd, Bidar  Hindu Co-operative Bank Ltd,Pathankot, Punjab  The Bhimavaram Urban Co-operative Bank Ltd, Hydrabad  The Mudhol Co-operative Bank Ltd,Mudhol, Karnataka  The Madgaum Urban Co-operative Bank Ltd Goa  Shivajirao Bhosale Sahakari Bank Ltd Pune  Millath Urban Co-operative Bank Ltd, Devangere, Karnataka  Kerala Mercantile Co-operative Bank Ltd Kozhikode  Shri Anand Co-operative Bank Ltd Chinchawad, Pune  KolikataMahila Co-operative Bank Ltd Kolkata, West Bengal  Punjab and Maharashtra Co-operative Bank Ltd., Mumbai |
| 2020                       |                4 |  Sri GururaghavendraSahakara Bank Niyamitha, Bengaluru, Karnataka  People's Co-operative Bank Ltd, Kanpur  KarnalaNagariSahakariBank Ltd; Panvel  Mantha Urban Co-operative Bank Ltd.Mantha, Jalna                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 2021 (till August 5, 2021) |                4 |  Sarjeraodada Naik ShiralaSahakariBank Ltd Shirala  Independence Co-operative Bank Ltd, Nashik  Deccan Urban Co-operative Bank Ltd,Vijaypura,Karnataka  Garha Co-operative Bank Ltd,Guna, Madhya Pradesh                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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