Which category of banks came under the regulation of Reserve Bank of India after the passing of the Banking Regulation (Amendments) Bill in 2020?

The correct answer is Cooperative Banks.

Key Points

• After the passing of the Banking Regulation (Amendments) Bill in 2020, Cooperative Banks came under the regulation of the Reserve Bank of India (RBI).
• This move aimed to bring accountability and transparency to the operations of Cooperative Banks.
• Cooperative Banks primarily serve the rural and semi-urban sectors of India, providing banking services to smaller customers.
• The amendment was introduced to ensure better management and governance of Cooperative Banks.

Additional Information

• Reserve Bank of India (RBI)
  • The RBI is the central banking institution of India, which regulates the issue and supply of the Indian rupee and manages the country's main payment systems.
  • It also aims to promote economic development and ensure financial stability.
• Banking Regulation Act, 1949
  • This act provides a framework for the regulation of banks in India.
  • It includes provisions relating to the control over the management, operations, and business of banks.
• Cooperative Banks
  • These are financial entities established on a cooperative basis and belong to their members, who are both owners and customers of the bank.
  • They are registered under the Cooperative Societies Act and play a significant role in the financial inclusion of rural and semi-urban areas.
• Financial Inclusion
  • It refers to providing access to financial services at an affordable cost to disadvantaged and low-income segments of society.
  • Cooperative Banks contribute to financial inclusion by offering banking services to underserved communities.