FM Nirmala Sitharaman assures change in cooperative bank laws if required

Tells PMC Bank depositors that government and Reserve Bank working on solving their problems.

The government is ready to bring in changes in the laws governing multi-state cooperatives, which also run banks, Finance Minister Nirmala Sitharaman said on Thursday. She also said a three-member committee comprising two secretaries of the finance ministry and a deputy governor of the Reserve Bank of India (RBI) would be set up to look into the issues of multi-state co-operative banks.

While speaking at a press conference here, Sitharaman said, “If amendments are going to help us curb malpractices and regulate and empower them better, the RBI will do it.” She added that the committee that would look into the matter would take necessary legislative steps to prevent such things from happening in future and empower the regulator. “In the forthcoming winter session of Parliament, if necessary, we will be bringing important legislation changes, which may be necessitated."

Before addressing the media, the finance minister also spoke to irate depositors of Punjab and Maharashtra Co-operative (PMC) Bank and assured them that the government and the RBI were working to solve their problems. She told them that she would speak to RBI Governor Shaktikanta Das on this matter.

Sitharaman also clarified that even though multi-state cooperative banks are not registered under the RBI, they are still regulated by the central bank and therefore it can be empowered to regulate these banks better.

The Rs 4,355-crore PMC Bank scam came to light after a whistleblower informed the RBI that the board of the cooperative bank was manipulating books of the bank to give loans to the Mumbai-based realty firm Housing Development & Infrastructure (HDIL).

The economic offences wing of Mumbai police has lodged a case against PMC Bank officials, HDIL group entities and its promoters. HDIL promoters Rakesh and Sarang Wadhawan, and former PMC Bank chairman S Waryam Singh and former managing director Joy Thomas have also been arrested. The Enforcement Directorate has also filed a money laundering case against the promoter of HDIL and the few board members of the PMC Bank.

Business Standard