New Delhi: Union Finance Minister Nirmala Sitharaman has said that co-operative societies do not have the power to use banks. Nirmala pointed out that co-operatives are not licensed under the Banking Regulation Act and are not RBI approved. The Center has rejected Kerala's demand as the state government prepares to approach the Supreme Court against the Reserve Bank's move to impose stricter controls on primary Co – operative Society.

The Reserve Bank of India has imposed restrictions on the use of the name 'Bank' by primary Co – operative Society and the withdrawal of deposits from non-voting members. This decision will adversely affect 1625 primary co-operative societies and thousands of other co-operative societies.

Co-operative societies were brought under the Banking Regulation Amendment Act, which came into force in September 2020. This provision however was not implemented in Kerala as suggested. V. N. Vasavan, Minister for Co-operation, however, said that the two Supreme Court judgments after the Banking Amendment Act were in the interest of the co-operative sector in the state and the Reserve Bank was trying to overcome this.