FM to ask RBI to ease withdrawal norms for PMC Bank depositors
Committee to consider legislative changes for regulating multi-state cooperative banks
Finance Minister Nirmala Sitharaman said on Thursday that she will speak to the Reserve Bank of India Governor Shaktikanta Das and convey the distress of depositors of Punjab and Maharashtra Cooperative Bank. The Finance Minister will request Das to consider expediting the withdrawal of funds by despositors. She also promised legislative changes, if required.
At present, PMC Bank is under directions of the RBI and depositors can withdraw only ₹25,000. Sitharaman, who met protesting depositors of PMC Bank, however, did not give a timeline for the withdrawal, and said that it would depend on the RBI and the administrator.
“I have spoken to the RBI Governor several times on PMC Bank and will do it today again This is process-driven, and will have to be discussed between the RBI and administrator,” she said.
She also said that a working group with the Secretaries of Departments of Economic Affairs and Financial Services, along with the Deputy Governor, RBI, would study in detail what has happened and understand shortcomings, and look at ways in which respective Acts can be amended to avoid similar situations.
“I have asked Secretary, DEA, and Secretary, DFS, to study shortcomings and suggest legislative steps to prevent such crises and empower the regulator. If necessary, in Winter session of Parliament, we will place the amendments,” she said, adding the committee will also look at whether deposit insurance should be hiked from the current ₹1 lakh.
Sitharaman said that Multi-State Co-operative Banks are regulated by the RBI. Rural Multi-State Co-operative Banks are registered with the Ministry of Rural Development, and Urban Multi-State Co-operative Banks are registered with the Ministry of Urban Development.
“In such cases, where there is malpractice, the RBI handles the whole matter,” she noted.
Addressing another briefing, Sitharaman said there is “some discussion” going on in the Finance Ministry on the Financial Resolution and Deposit Insurance (FDRI) Bill. “We are conscious that for financial institutions, something similar to the IBC does not exist. Some thought process is on, but in what form I can’t say at present,” she said.