Mumbai: Finance Minister Nirmala Sitharaman, who faced angry depositors of scam-hit Punjab & Maharashtra Cooperative Bank (PMC) here Thursday, announced setting up of a panel to recommend legislative changes to ensure better governance at co-operative banks.
If necessary, the government will amend the laws governing cooperative banks in the winter session of Parliament, Nirmala Sitharaman said at a press conference.
After the Rs 4,500-crore scam came to light at the PMC Bank, the Reserve Bank of India (RBI), which put curbs on withdrawal of funds from the bank, had also said that it would examine if the regulatory framework needed tweaks.
Sitharaman said a committee comprising secretaries of Economic Affairs and Financial Services, Rural Affairs and Urban Development ministries and a Deputy Governor of the RBI would be formed.
Through this committee, the government intends to ‘understand and take necessary legislative steps to prevent such things from happening in the future, empower the regulator better’, Sitharaman stated.
Stating that she is not presuming that there are shortcomings in the present laws, the finance 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 which may be necessitated’.
After the scam came to light last month, the RBI capped withdrawals from the bank at Rs 1,000 and later increased it to Rs 25,000 following protests by depositors.
PMC Bank had allegedly lent over 70 per cent of its Rs 9,000 crore in loans to near-bankrupt realty player ‘HDIL’.
Irate depositors gathered outside the BJP’s office in the southern part of this city of Nirmala Sitharaman’s press conference. When she arrived, they shouted slogans, demanding that their money should be returned to them. The minister and a few of the depositors went inside and had a brief conversation.
“I heard them about their problems and explained to them that multi-state cooperative banks… are regulated by the RBI,” she later said, adding that the government’s role is limited.
But Sitharaman assured that she will speak to RBI Governor Shaktikanta Das and convey the ‘urgency and distress’ of the depositors.
When asked when the depositors can get their money back, Sitharaman she it was a process-driven exercise between RBI and the bank administrator appointed by the central bank. “But, I can emphasise that it has to be done quickly,” she said.
Harbans Singh, a bank customer, told reporters that the depositors expected the minister to give an assurance that their money was safe, but they were disappointed.
“Sixteen lakh depositors are in distress. What is our fault? You have got Rs 4,000 crore assets. Sell it and start the bank and then go ahead with whatever action you want against the accused,” the depositor stated.
PTI