An NGO, Consumer Protection and Analytic Committee(CPAC), in a PIL has sought annulment and quashing of amendment made in the Banking Regulation Act in the year 1966.
The division bench of acting chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala, after hearing advocate Vishwas Shah for the petitioner today adjourned the matter for three weeks.
"The primary object of the aforesaid amendment was to bring Cooperative Banks within the discipline of RBI which was constituted by RBI Act, 1934. This has resulted in dual control pattern being created," says the petition.
"Thus a co-operative society for incorporation, regulation and winding up of co-operative society is governed by State law and the regulation of banking business is by the Central government," the petition said.
The petitioner has pointed out that from the legal point of view all co-operative banks are co-operative societies, but a co-operative society may or may not be a Co-operative Bank.
"Unless it has intra-state functions, all co-operative societies are regulated only by State co-operative laws, while co-operative banks are regulated both by central banking laws and state co-operative societies acts as well. This has resulted in dual control pattern being created for co-operative banks," the petition has claimed.
Submitting that, the dual control has created several complications and problems for smooth functioning of co-operative societies, the PIL has demanded the HC to declare that the Union of India has no legislative competence to enact law for Co-operative societies registered under the State co-operative law.
