The Banking Regulation (Amendment) Ordinance, 2020 (Ordinance) was promulgated on June 26, 2020, to bring ‘Co-Operative Banks’ under the ambit of the RBI by amending the Banking Regulation Act, 1949 (Banking Act). The Ordinance is intended not to overlap with the powers that already exist with the Registrars under the respective State Co-Operative laws. The Non-Application of the Banking Act continues as far as Primary Agricultural Credit Societies (PACS) are concerned and the Ordinance extends the non-applicability to co-operative societies whose primary object and principal business is long-term finance for agricultural development. The primary reason for this Ordinance was the case of the Punjab and Maharashtra Cooperative Bank (PMC Bank or PMC Case), wherein the RBI imposed significant restrictions of withdrawal and suspended its business. The PMC Bank was ramped up with financial irregularities and failed internal control systems. These cases significantly highlight the problems of dual regulation plaguing Co-Operative Banks, the sector whose depositors will now view the ordinance as a much-needed measure to protect their interest. Sandeep Bhalla v The Reserve Bank of India: The writ petition was filed by one of the depositors of the PMC Bank wherein the question being considered is that “if a scheme could be drawn up by the Government and the RBI for ‘Yes Bank’, why the same can’t be extended to the depositors of the PMC Bank”. Ordinance an Answer to the PMC Case: The introduction of the ordinance offers much relief to the plagued UCB sector. The Urban Co-Operative Banks have now been brought under the ambit of the Banking Act. Apart from maintaining the exclusion which is already discussed, among others, the Ordinance adds that at first, a scheme of reconstruction or amalgamation can be initiated any other time and not necessarily during the moratorium; second, during the moratorium, the UCB cannot grant any loans or make investments in any credit instruments. Third, the UCB may issue equity shares, preferential shares, special shares, unsecured debentures or bonds with the prior approval of the RBI. Fourth, the UCB cannot reduce or withdraw capital except as per the conditions specified by RBI and there can be no demand for surrendered shares. Fifth, the board of a UCB registered under a State Law, can be superseded only with the consultation of the concerned State Government. Finally, the RBI may exempt the UCBs or a certain class of UCBs from the application of the provisions of the Banking Act. A note prepared by former Planning Commission adviser K.D. Zacharias, uploaded on the RBI’s website, noted that “banking being a Central subject and co- operatives operating within a State being a State subject under the Constitution, providing an overriding effect to the banking laws over the law governing cooperative societies in case of conflict is a contentious issue.” It may be noted that generally, where a state and central law are in direct conflict, precedence is given to the law promulgated by the centre.