New Delhi: Government will soon appoint a fourth Deputy Governor in Reserve Bank (RBI) to regulate the cooperative banking sector, which has seen a series of scams in the last two years.

"The Prime Minister has in principle agreed for the appointment of a fourth Deputy Governor in RBI. A final decision would be taken within a month," Minister of State for Finance, Anandrao Adsul told reporters in New Delhi.

There is a provision for a fourth Deputy Governor in RBI and the government was considering the option to regulate the cooperative sector.

At present, RBI is headed by Governor Bimal Jalan. The three Deputy Governors are Rakesh Mohan, Vepa Kamesan and G P Muniappan.

The idea of appointment of a fourth Governor cropped up after a series of scams hit Madhavpura Mercantile Cooperative Bank and half a dozen other cooperative banks in the last two years.

"Government has taken this initiative because the cooperative sector was witnessing dual regulation, which led to a series of scams," Adsul said.

The scams took place due to the laxity in regulation for cooperative banks, which are set up in accordance with state cooperative Acts but also come under the ambit of RBI.

Some of the cooperative banks had taken large exposure in stock markets and got into financial problems after the markets collapsed in 2001.

Adsul said the states need to amend their cooperative Acts to empower RBI with the regulatory teeth.

PTI