RBI
RBI
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BHOPAL: Madhya Pradesh state government is in a fix after Reserve Bank of India (RBI) issued guidelines for appointments of managing directors (MD) and whole time directors (WTD) restricting MLAs, MPs and persons holding positions in municipal or local bodies in urban cooperative banks.

Madhya Pradesh government had allowed the appointments of Members of Parliament and Members of Legislative Assembly to become chairmen and vice-chairmen of the cooperatives through an ordinance in the year 2020.

Later, the ordinance was turned into law during Shivrajís tenure after falling of the Kamal Nath-led Congress government. This move of the government was widely criticised as well.

Cooperative banks in state were always considered to be fertile ground for political rehabilitation. This was the main reason that the government brought in an ordinance and then converted into law so that political representatives that could not be given ministerial berth could be adjusted honourably in the cooperative sector.

ìWe havenít received the order yet. We will examine the order when we get it and then present it before the government that will take the step after legal deliberations,î said commissioner, cooperatives, Naresh Pal.

However, experts in banking sector opine that cooperative banks are bound to follow norms set by the RBI and state government would have to repeal the law that was promulgated as the Madhya Pradesh Cooperative Societies (Amendment) Ordinance 2020.

RBI issued the prescribed qualifications and ëfit for properí criteria for MD and WTDs of primary urban cooperative banks this Friday which bars MPs, MLAs from these posts.

According to guidelines, the person shall not be engaged in any other business or vocation or be holding the position of a Member of Parliament or State Legislature or Municipal Corporation or Municipality or other local bodies. They should also not be a director of any company other than a company registered under section 8 of the Companies Act, 2013 or be a partner of any firm which carries on any trade, business or industry, the RBI said.

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