The Banking Regulation (Amendment) Act, 2020 will replace the Banking Regulation (Amendment) Ordinance, 2020. The Amendment Act is to provide for better management and proper regulation of co-operative banks and to ensure that the affairs of the co-operative banks are conducted in a manner that protects the interests of the depositors, by increasing professionalism, enabling access to capital, improving governance, and ensuring sound banking through the Reserve Bank of India.

The following main amendments have been laid down-

  1. Section 3 has been substituted to provide that the Act shall not apply to— 
    (a) a primary agricultural credit society; or 
    (b) a co-operative society whose primary object and principal business is providing of long     term finance for agricultural development if such society does not use as part of its name, or     in connection with its business, the words “bank”, “banker” or “banking” and does not act     as drawee of cheques;
  1. Amendment of Section 45 to prepare a scheme for the reconstruction or amalgamation of the banking company without the necessity of first making an order of moratorium by RBI to mitigate the potential disruptions in the financial system.
  2. Amendment of Section 56 to provide that notwithstanding anything contained in any other law for the time being in force, the provisions of the Act shall apply to co-operative societies, subject to the modifications specified therein.