Mumbai: Confederation of Indian Industries (CII) on May 7 demanded that co-operative banks be directly brought under the supervision of the Reserve Bank of India.

"Co-operative banks should be brought under RBI to improve their functioning", newly elected CII president Ashok Soota told reporters in his first interaction with the media in Mumbai.

On the multi-crore government securities scam involving co-operative banks in Maharashtra, he said investors' confidence in financial sector entities was crucial and there was need to improve quality of their governance.

CII state council chairman Ganesh Natarajan said, "it is important matter and state council would discuss problems of co-operative banks soon".

On April 25, Nagpur District Central Cooperative Bank (NDCCB) had filed a complaint against five broking firms, including Home Trade Ltd for not returning G-sec worth Rs 125.60 crore.

The investigations by National Bank for Agriculture and Rural development had revealed that many co-operative were caught in problems over routing their investments in G-sec though broking firms.

Sensing problems with district co-operatives banks, RBI directed the state registrar of co-operatives to dissolve boards of three banks including NDCCB.

Acting on RBI recommendation, the registrar has already appointed administrator to Nagpur-based bank and will soon appoint the same for banks of Wardha and Osmanabad.

PTI