7(Amendments to Banking Regulation Act)

Question 1

why the need for amendment was felt

Answer 1

Punjab and Maharashtra Cooperative(PMC)crisis

Question 2

what is the crisis

Answer 2

This bank gave 75% of the loan to only one company.
To avoid it questions around 21000 fake accounts was made and loan was distributed.

Now the company declared to be bankrupt thus bank also failed

Question 3

what is a coopeartive bank

Answer 3

A bank where all investors are its owners

Question 4

what are the changes introduced

Answer 4

1 15000 cooperatives are brought under RBI regulations
2 CEO and other members will be done by RBI
3 RBI will decide on loan waivers
4 RBI will have the powers to supersede the board
5 Insurance cover increased from 1 lakh to 5 lakh