Press Release on Banking Regulation ( amendment) Ordinance, 2020

Press Release  of OSAA

on

Banking Regulation ( amendment) Ordinance, 2020

Bhubaneswar : 30.6.20.  Series  of efforts  of  Social Activists , more particularly RTI Activists  working under  the banner of Odisha Soochana Adhikar Abhijan (OSAA)  in terms of raising issues of corruption and irregularities in Odisha State Cooperative Scam  and submitting plethora of memoranda to the the Prime Minister of India, Union Finance Minister, Reserve Bank of India, NABARD   demanding inquiry into Rs. 500 crore  scam in OSCB  committed  by State Govt. officials mostly Bishnupada Sethy , IAS , the then Management-in-charge  ( 2013 TO 2015)  and Sri Tusar Kanta Panda, Managing Director, OSCB ( 2013 to 2018) yielded big results, when the Govt. of India declared ordinance  for amendment of  Banking Regulation Act, 1949. The Banking Regulation Act, 1949 amendment Ordinance, 2020  seeks to enforce banking regulation guidelines of the RBI to cooperative banks (like other commercial banks), while administrative issues will still be guided by Registrar of Cooperative of Societies. This Amendment has given sweeping power to RBI on the regulatory and governance functioning of all Cooperative Banks of the country including the State Cooperative Banks, District Central Cooperative Banks and Urban Cooperative Banks. The Ordinance restricts cooperative banks from making loans or advances on the security of its own shares. Further, it prohibits the grant of unsecured loans or advances to its directors, and to private companies where the bank’s directors or chairman is an interested party.

RBI was earlier shying away from their responsibility on the regulatory and governance failure issues of Cooperative Banks taking plea of duality of control and now after promulgation of the ordinance, sweeping powers have been given to RBI on regulatory and governance matters of all types of Cooperative Banks. Henceforth it will not be easy for RBI to dump Cooperatives to the mercy of State Governments.

The areas of regulation which the RBI can now (by the Ordinance) can exercise are:

1. Issue of share capital and similar securities by co-operative banks would be regulated.2. The RBI can give directions for minimum capital requirement for cooperative Banks or raising the capital by the means of both Equity and Debt instruments.

3. The appointment of CEOs would require prior approval from the RBI and in this respect, qualifications would be set as to who could be appointed as followed in case of commercial banks.

4. RBI may supersede the Board of Directors of a multi-state cooperative bank for up to five years and supplement it with Board of Management. In the case of a co-operative bank registered with the Registrar of Co-operative Societies of a State, the Reserve Bank shall consult the concerned State Government before issuing order for supersession of the board of directors under section 36AAA of the Banking Regulation Act, 1949.

5. RBI can supersede management in case of liquidation or failure of any cooperative bank.6. The RBI is empowered to seek information from cooperative banks in the form of returns about the assets, liabilities, profitability, and operations.

7. The RBI can direct merger or consolidation of cooperative banks.

8. The RBI can now specify conditions when unsecured loans or advances may be granted and specifies the manner in which the loans may be reported to RBI.

9. The cooperative banks would be audited according to RBI rules.

Since 2015, RTI Activists like Pradip Pradhan, Ashok Nanda, Sudhir Mohanty , Srikant Pakal  have been  giving series  of petitions, memorandum and  complaints  to  the Reserve Bank of India, NABARD, the Prime Minister of India, Union Finance Minister  seeking  inquiry into multi-crore scam  in OSCB      and quick legal action against perpetrators  of crime. On  the basis of several petitions , NABARD conducted  statutory inspection of Odisha State Cooperative  Bank with reference to its financial position  as on 31^st March 2018.  This inspection Report presented to Registrar of Cooperative Societies, Odisha in April ,2019 gives  a picture of huge fraud, forgery  and loot of public money in name of various schemes  and agriculture loan to the farmers.  Though one year passed, the RCS, Odisha, OSCB did not take any steps . 

The  date-wise  petitions submitted  by RTI Activists on fraud, forgery,  corruption in OSCB  is as follows.

Date of  Submission of Complaint	Authority  who complaint  was files	Content  of complaints
28.8.17	The Chief General Manager, NABARD,   Bhubaneswar Regional Office, Bhubaneswar	Financial Irregularities and misappropriation of Public Funds in Odisha State Cooperative Bank.
1.7.19	Governor, Reserve Bank of India, Mumbai	Allegation against financial irregularities in Orissa State Cooperative Bank under protection of Senior officials of NABARD.
9.7.19	Chairman, NABARD, Mumbai	Request for inquiry  into Detection of massive financial and governance irregularities in the Statutory Inspection of Orissa State Cooperative Bank conducted by NABARD.
16.7.2019	Governor, Reserve Bank of India, Mumbai	Manipulation of statutory inspection report of Orissa State Cooperative Bank (OSCB) conducted u/s 35 (6) of B. R. Act, 1949 by officials of NABARD.
1.7.19	Sri Narendra Damodardas  Modi Hon’ble Prime Minister New Delhi	Allegation against financial irregularities and misappropriation of Central fund meant  for farmers  in Orissa State Cooperative Bank under protection of Senior officials of NABARD.
27.7.19	The General Manager,           DCBR, Reserve Bank of India, Bhubaneswar Regional Office,  Bhubaneswar.	Manipulation of statutory inspection report of Orissa State Cooperative Bank (OSCB) conducted by NABARD u/s 35 (6) of B. R. Act, 1949

 Pradip Pradhan

RTI Activist

M-9937843482

Date- 30.6.20