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RBI extends supersession of Abhyudaya Co-operative Bank's board by a year
వార్తల్లో ఎందుకు?
One year, then another: the Section 36AAA power RBI used on Abhyudaya Bank, a GS3 banking staple
RBI extends the supersession of Abhyudaya Co-operative Bank's board under the Banking Regulation Act.
Why it matters: asked in UPSC 2024; GS-3 core; factual, Prelims-type
What you need to know
2 నిమి
The Reserve Bank of India has extended by another year the supersession of the board of directors of Abhyudaya Co-operative Bank Ltd., Mumbai.
The board was first superseded for one year on 24 November 2023, and the extension is ordered under Section 36AAA read with Section 56 of the Banking Regulation Act, 1949.
Supersession keeps a co-operative bank with governance concerns under regulatory control.
మూలాలు: Topper IAS editorial (PIB / The Hindu / Indian Express)
ముఖ్య వాస్తవాలు
Remember these
- RBI extended the supersession of the board of Abhyudaya Co-operative Bank Ltd., Mumbai, by another year
- The board was first superseded for one year on 24 November 2023
- The extension is ordered under Section 36AAA read with Section 56 of the Banking Regulation Act, 1949
- Section 56 applies the Banking Regulation Act to co-operative banks with modifications
- Supersession keeps a co-operative bank with governance concerns under regulatory control
ప్రిలిమ్స్ · మెయిన్స్
How the exam will ask it
ప్రిలిమ్స్
- The RBI can supersede the board of a co-operative bank under Section 36AAA read with Section 56 of the Banking Regulation Act, 1949.
- The Banking Regulation Act, 1949 applies to co-operative banks through Section 56, with modifications.
- Supersession of a board is a regulatory tool to address governance concerns in a bank, and it is time-bound but extendable.
మెయిన్స్
GS Paper 3 (Banking / Co-operative banks). Repeated governance failures in urban co-operative banks led to RBI's power to supersede boards under the Banking Regulation Act, 1949, which protects depositors but extends regulatory control over co-operative institutions. The way forward lies in stronger board professionalisation, clearer RBI-State dual-regulation boundaries and timely resolution so that supersession does not become indefinite.
PYQ connection
A question UPSC has already asked on this
With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements:
- There is no minimum capital requirement for wholly owned banking subsidiaries in India.
- For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
సమాధానం చూడండి
సమాధానం: D
Why this matters: today's issue is directly connected to a concept UPSC has already tested. Read the story with this question in mind.
Practise this PYQ →Quick recall
Answer before you reveal
The Reserve Bank's power to supersede the board of directors of a co-operative bank, as used for Abhyudaya Co-operative Bank, flows from the:
- Reserve Bank of India Act, 1934
- Companies Act, 2013
- Multi-State Co-operative Societies Act, 2002
- Banking Regulation Act, 1949
సమాధానం చూడండి
సమాధానం: D — Correct: Banking Regulation Act, 1949 — Section 36AAA read with Section 56 of the Banking Regulation Act, 1949 gives the RBI this power over co-operative banks. • Reserve Bank of India Act, 1934 — wrong: The RBI Act governs the central bank's own functions, not supersession of a co-operative bank's board. • Companies Act, 2013 — wrong: The Companies Act does not govern banking regulation by the RBI. • Multi-State Co-operative Societies Act, 2002 — wrong: The Multi-State Co-operative Societies Act covers registration and governance, but this power comes from the banking law.
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