PMC crisis: Nirmala Sitharaman says she'll talk to RBI Governor

Business

PMC crisis: Nirmala Sitharaman says she'll talk to RBI Governor

Written by

Shalini Ojha

Twitter

Last updated on Oct 10, 2019, 02:49 pm

Finance Minister Nirmala Sitharaman met distressed customers of the crisis-hit Punjab and Maharashtra Co-operative Bank (PMC) on Thursday and assured them she will speak to Shaktikanta Das, the Governor of Reserve Bank of India (RBI), this evening.

Dozens of customers gathered outside the venue of her press meet to air their grievances.

She also said amendments will be brought to avert such a meltdown.
In this article
What is the PMC Bank crisis all about? Obviously, customers of the bank suffered Finance Ministry not involved but will speak to RBI: Sitharaman Earlier, RBI told depositors there's no need to worry Separately, Mumbai police listed alleged crimes of HDIL officials Customers protested outside court, spoke about their ordeal
Crisis

What is the PMC Bank crisis all about?
Founded in 1984, PMC Bank was one of the most prominent cooperative banks in India. Till a scam was unearthed.

Apparently, the top brass issued loans to bankrupt Housing Development and Infrastructure Ltd (HDIL). A loan to the tune of Rs. 6,500 crore, four times its regulatory cap, was given.

Last week, two HDIL directors were arrested by Mumbai Police's Economic Offense Wing.
Sufferings

Obviously, customers of the bank suffered
As it happens in bank frauds, the honest customers suffered. Initially, RBI said customers can withdraw only Rs. 1,000 from their bank accounts. Later, the cap was increased to Rs. 10,000 and last week to Rs. 25,000.

But customers feel this amount is still not enough.

Hoping to get some reprieve, they reached the place where Sitharaman addressed the media in Mumbai.
Statement

Finance Ministry not involved but will speak to RBI: Sitharaman
Underlining that her Ministry has nothing to do with decisions of regulator RBI, Sitharaman said, "I will once again talk to the Governor of Reserve Bank this evening to convey the distress of PMC clients."

She also added, "I've asked the secretaries of the Ministry to study in detail as to what is happening."

RBI representatives will also understand the shortcomings, she said.
RBI's statement

Earlier, RBI told depositors there's no need to worry
The meltdown has sparked fears among customers and raised concerns about the Indian banking system. But on October 1, RBI released a statement to diffuse such emotions.

"There are rumors in some locations about certain banks including cooperative banks, resulting in anxiety among the depositors. RBI would like to assure the general public that the Indian banking system is safe," the statement read.
Probe

Separately, Mumbai police listed alleged crimes of HDIL officials
Meanwhile, police told a local court on Wednesday that Rakesh Kumar Wadhawan and Sarang Wadhawan, the arrested officials of HDIL, diverted Rs. 90 crore of loan taken from PMC to clear their dues at Bank of India.

Cops sought further custody of the two promoters as well as former chairman of PMC bank, Waryam Singh.

Their police custody was extended till October 14.
Protest

Customers protested outside court, spoke about their ordeal
Notably, the troubled customers of PMC staged a protest outside court yesterday. Some of them carried placards that read "No Bail, Only Jail".

A protesting woman told ET her husband suffers from leprosy and they managed to save some lakhs in the Andheri branch of PMC.

"Both the government and the RBI aren't acting enough to safeguard our interests," she told the daily.