Pawar meets PM Modi, red flags change in law to regulate cooperative banks

NCP Prime Minister Sharad Pawar, who held an hour-long meeting with Prime Minister Narendra Modi on Saturday, raised serious questions about the constitutional validity of the Banking Regulation Act amendments, particularly is an infringement on the subject of the state and a violation of the guiding principles of state policy.

Pawar is concerned about giving greater rights to Reserve Bank of India to align the area of ​​cooperation to the growing displeasure of the opposition on the issue, especially after the establishment of a cooperation ministry under Interior Minister Amit Shah during the expansion of the Cabinet just concluded.

In a six-page letter to the Prime Minister published after Saturday’s meeting, Pawar stated that the amendments in the Act violate the right of the state to legislate in the field of cooperation. The head of the NCP said that “the provisions for the establishment, regulation and termination of cooperative societies are preserved as state actors under Section 32 list II of schedule VII of the Indian Constitution”.

Furthermore, he cited relevant provisions in the Directive Principles of State Policy, which mentioned that the state should promote “voluntary formation, autonomous activity, democratic control and professional management of cooperative societies”. According to Pawar, these are violated when the new amendments give the RBI the power to interfere directly in the affairs of the Cooperative Banks, deeming it “unconstitutional and illegal”.

The National Assembly has also expressed similar views.

Pawar .’s second letter

As reported by ET, Kerala MLA Ramesh Chennithala was one of the first to connect this with the formation of the cooperative ministry, saying it was “an infringement on the rights of states as cooperatives are a subject matter”. gorvernment’s”. He also called the move “unconstitutional”. Ky like Maharashtra, Kerala and West Bengal have a strong system of cooperation with powerful non-BJP parties.

However, Pawar did not misrepresent the goals behind improving surveillance but said certain provisions conveyed “overzealous legislation” and went against the principles of the Constitution. In his letter, Pawar cited the Constitutional bench judgment of Supreme Court in Pandurang Ganpati Chaugule versus Bank Vishwasrao Patil Murgud Sahakari Bank Ltd says co-operative banking legislation is the “exclusive domain” of the state government. The head of the NCP has argued that “hidden sections have been introduced to amend section 56 of the BR Act beyond the legislative authority of Parliament and hence null and void under Article 123(3) of the Constitution of India”. “.

This is the second letter written by Pawar to Modi on this matter. In August 2020, he wrote a letter about the Banking Regulation Act Ordinance and how it was passed into a bill without discussion. Most of the NCP and Congress leaders control a large number of cooperatives in Maharashtra. The party believes that the Banking Regulation Act will be used to replace a board of directors controlled by political representatives. The creation of the new ministry, headed by Amit Shah, and issues related to the field of cooperation are likely to be raised by the Opposition during the monsoon session of Parliament that begins on July 19.

The director of the NCP has taken issue with the RBI which is given powers under the Act to deal with issues related to the issue and return of equity, appoint and remove directors, establish the Board of Directors, appoint CEO duties, audit obligations, etc. which he says are “excessive legislation”.

In the detailed letter, the NCP leadership drew the Prime Minister’s attention to how the powers of the RBI directly conflict with the powers of the state in regulating the field of cooperation. “The 97th Constitutional Amendment ended and, above all the Acts, gave the authority to the general body to appoint statutory auditors, whereas under the BR Amendment Act, the RBI required approval. agreement of the RBI to appoint the statutory auditor.”


PaulLeBlanc is a Interreviewed U.S. News Reporter based in London. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. PaulLeBlanc joined Interreviewed in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing:

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