Finance Minister P. Chidambaram on Thursday told the Lok Sabha that the government would bring a comprehensive bill in the next Budget session of Parliament to amend the Banking Regulation Act. The bill would strengthen cooperative banks as their condition across the country was ‘‘appalling’’, he said.Chidambaram was replying to a discussion before the Lok Sabha passed the Banking Regulation (Amendment) and Miscellaneous Provisions Bill, 2004 to replace an ordinance promulgated by the government on September 24 to provide that licences granted to the existing multi-state cooperative banks by RBI shall be deemed to have been validly granted. The BIll was passed with less than 50 MPs present in the Lok Sabha at the time.Replying to the debate, Chidambaram said the government has sought comments from RBI for the comprehensive bill as he was ‘‘not at all happy at the state of cooperative banking in the country.’’The Finance Minister also announced that the government was planning to double the target of agricultural credit in the next three years. He said the government had to bring the ordinance after the Supreme Court had held on October 29 last year that a state government did not not have the power to notify a multi-state cooperative society as a cooperative bank and RBI did not have the power to grant a licence.Under the bill, the FM said RBI would be allowed to issue licences to cooperative societies registered under the Multi-state Cooperative Societies Act, 2002 to carry on the banking business.He said the bill made provisions for supersession of Board of Directors of a multi-state cooperative bank in certain cases. Members welcomed the bill as after the court’s judgement doubts had been expressed about the legality of the licences issued to other MSCBs.
