New Delhi -°C
Today in New Delhi, India

Oct 22, 2019-Tuesday



Select city

Metro cities - Delhi, Mumbai, Chennai, Kolkata

Other cities - Noida, Gurgaon, Bengaluru, Hyderabad, Bhopal , Chandigarh , Dehradun, Indore, Jaipur, Lucknow, Patna, Ranchi

Tuesday, Oct 22, 2019

FM: Will form panel to review regulations of multi-state co-operative banks

mumbai Updated: Oct 11, 2019 00:21 IST
Eeshanpriya MS
Eeshanpriya MS

Union finance minister Nirmala Sitharaman on Thursday announced the formation of a high-level committee to look into regulations that govern multi-state co-operative banks, such as the Punjab and Maharashtra Co-operative Bank (PMC). She also assured the bank’s account holders that she will speak to the Reserve Bank of India (RBI) to examine if customers can withdraw more money.

The RBI imposed banking restrictions on PMC bank in September, leaving thousands of account holders clueless about the fate of their money.

The high-level committee will comprise two secretary-level officers from the economic affairs and banking departments of the finance ministry, with a deputy governor-level representative from RBI, to review banking regulations for multi-state cooperative banks. The PMC Bank is facing a crisis after an alleged ₹4,500-crore fraud came to light last month.

It is alleged that its

top officials hid

loan defaults by

realty group HDIL, which accounted for nearly 70%

of its total advances.

The PMC case has sparked renewed concerns about India’s banking sector, which has been rocked by a multi-billion dollar fraud at a state-run lender, the collapse of a major infrastructure lender, bad loan issues at state-run banks and a liquidity squeeze that has hit shadow lenders.

“Not only will they review the regulations, but suggest ways to strengthen them. If the committee suggests amendments to any acts that govern such co-operative banks, those amendments can be made in the upcoming winter session of the Parliament,” Sitharaman said. “This will help in streamlining the regulations, if needed, and can also strengthen the regulator,” she added.

Upon hearing news that Sitharaman was to visit the Bharatiya Janata Party (BJP) office at Nariman Point in South Mumbai, several PMC account holders gathered at the office to meet her. Sitharaman delayed her media briefing for more than 20 minutes to address PMC customers.

After a 20-minute meeting with customers, Sitharam told the media, “Multi-state co-operative banks are regulated by RBI, even though they are registered under urban or rural development ministries. It is outside my jurisdiction to make a commitment to the customers, but I can say that it needs to be done quickly. I assured them I will speak to RBI on returning to Delhi on Thursday evening”. However, customers who met her are unhappy with the outcome of their meeting. Nikhil Bora, 50, a businessman who has Rs40 lakh locked in at PMC bank, said after meeting Sitharaman, “She is just passing the buck by telling us she has no control over regulations and that RBI is the regulator. Now that she has assured us to speak with RBI, we expect to hear from her about the outcome of the meeting, tomorrow.”

Sitharaman said she was in Mumbai to talk about the BJP-Shiv Sena government in Maharashtra and its achievements. She praised Maharashtra chief minister Devendra Fadnavis’s tenure. “The CM has done exceptional work through Jal Yukt Shivar, to mitigate drought in the state,” she said.

She further said, “Here is a CM who has done an incredible job keeping peace in Mumbai and the state, who understands the crucial contribution of Mumbai to commerce in the country. He has managed to address all demands of the many sensitive communities in the state.”“For the first time in a long time, Maharashtra has a chief minister and a government who remained effectively in power for a full five-year term, after Vasantrao Naik.”

Regarding farmer suicides in the state, Sitharaman said, “Every time a farmer commits suicide, it is absolutely heart-breaking.”

First Published: Oct 11, 2019 00:21 IST

top news