‘Panel to see multi-state Co-Op bank norms’: Nirmala Sitharaman

After facing angry depositors of PMC Bank, FM announced setting up of a panel to suggest legislative changes

Published: 11th October 2019 08:07 AM  |   Last Updated: 11th October 2019 08:07 AM   |  A+A-

Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman

By Express News Service

MUMBAI: The government would constitute a committee comprising of secretaries from the finance ministry and the Reserve Bank of India (RBI) to look into amendments required to bring appropriate regulation of multi-state urban co-operative banks, Finance Minister Nirmala Sitharaman said.

Multi-state co-operatives are regulated by the central bank.

A deputy governor-level official from RBI as well as two secretaries from the finance ministry will be part of the committee that will study multi-state co-operatives to understand shortfalls and look at amendments to the laws to curb malpractices, she said.

Met with protests from the aggrieved customers of the Punjab and Maharashtra Co-operative Bank (PMC Bank) outside the BJP headquarters in Mumbai on Thursday, Sitharaman said the required amendments, if any suggested by the committee, could be moved as early as the upcoming winter session of the Parliament. She met the protestors before addressing her scheduled press conference.

“I am in touch with the RBI governor, have spoken to him many times earlier, will speak to him again today,” she said.

Since the RBI has already put a resolution person-in-charge, she said, increasing the limit or the payment mechanism need to be discussed between RBI and the administrator appointed for PMC Bank, the minister further said.

Protestors demanded immediate relief. “You take your own time and process to recover money from the fraudsters. But, either merge the bank with any other or make arrangements to return our money,” demanded one protestor.RBI had increased the withdrawal limit per person for six months from Rs 1,000 announced initially to Rs 25,000 eventually.

Some of the depositors said they are hard-pressed for cash even to meet with medical emergencies. On this, Sitharaman said she will speak again to the RBI governor on allowing depositors to withdraw funds. She said she cannot comment on if RBI as a regulator failed without knowing all the details. Also, when asked about increase in deposit insurance cover from Rs 1 lakh at present, Sitharaman said it will also be put up before the committee.

Panel will study issue

The minister said the panel will study the issue and “if necessary, in the forthcoming winter session of Parliament itself, we will be bringing in any amendments necessitated.

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