Union Finance Minister Nirmala Sitaraman on Thursday assured the account holders of the crisis-hit PMC Bank that she would speak to the RBI Governor Shaktikanta Das once again, convey their “sense of urgency and distress” and request the latter to “expedite” grant of permission for withdrawal of money deposited by them in the bank.
After scores of affected account holders of PMC Bank staged a protest a protest in front of the State BJP headquarters in Mumbai, Sitaraman — who was in Mumbai to campaign for the State Assembly polls, delayed her interaction with the media, spoke to a delegation of protesters and assured them that she would take up their issue with the Governor
Talking to media persons later her meeting with the TMC Bank’s account holders’ delegations, Sitaraman said: “ I have been talking to the RBI Governor. On my return to Delhi, I shall once again talk to him (RBI?governor) this evening and convey the sense of urgency and distress that the clients of PMC have expressed before me and I shall request him to expedite the clearing of or giving permission for withdrawal of their monies which are deposited”.
It may be recalled that on September 24 placed Punjab & Maharashtra Cooperative (PMC) Bank Ltd under regulatory restrictions, thus barring the bank from carrying out routine and major financial transactions, including withdrawal of cash exceeding Rs 1,000 by each of the depositors, for a period of six months. The RBI subsequently raised the cash withdrawal limit to Rs 10,000 per account and has now scaled up the withdrawal limit to Rs 25,000 per account.
The RBI had said that the directions imposing major restrictions on the PMC Bank had been “necessitated” because of account of “major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various Off-site Surveillance reports to RBI that came to the Reserve Bank’s notice recently”.
Sitaraman, who was greeted by angry protesters on her arrival at the BJP headquarters, explained that the Finance ministry had nothing to do with the RBI’s decision to impose regulatory instructions on the PMC Bank.
“Multi state cooperative banks like the PMC Bank are regulated by RBI. But rural cooperative banks’ registration is done by the rural development ministry but they are regulated by the RBI. Similarly the urban cooperative banks are registered by the urban development ministry but are regulated by RBI,” she said.
“I have explained to the affected PMC Bank customers that wherever there is malpractice and where the board of directors is by-passed, the RBI is the one that handles such situations. I have told them that this does not mean the government of India is not doing anything it.”
Sitaraman said that she had asked the Department of Economic Affairs and the Banking Secretary to work together with urban and rural development ministries so that multi state cooperatives that also run banks to study in detail what was happening and what were the shortcomings. An RBI nominee, at deputy governor level, will also participate in these joint meetings with the secretaries of DFA, Banking, rural and Urban secretaries. They would also look at what amendments are needed to better empower the RBI on this front.
“If amendments are going to help curb malpractices and if they are going to help us better regulate the banks through the RBI, we would like to do it. …If necessary, we will bring in necessary regulations or amendments during the forthcoming winter session of Parliament,” she said.
Friday, 11 October 2019 | TN Radhunatha | Mumbai
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