Finance Minister Nirmala Sitharaman on Thursday promised agitated PMC customers that she will request Reserve Bank of India to expedite approvals to let depositors withdraw their money from the Punjab and Maharashtra Cooperative Bank Ltd.
Sitharaman is in Maharashtra capital Mumbai to attend various programmes organised by the Bharatiya Janata Party for the state elections later this month. One of them was a media interaction. But as she reached the Mumbai BJP’s office, the minister faced a large number of angry bank customers protesting the RBI order that imposes restrictions on customers withdrawing money.
When the RBI detected large-scale fraud in the bank, it had imposed restrictions on withdrawing more than Rs 1,000 from each account. This limit has been revised twice since then and stands at Rs 25,000. The bank’s customers, many of them had deposited their life savings in the cooperative bank, have been demanding that the central bank lift the restrictions and want the government to intervene.
Nirmala Sitharaman first met the protesting customers at the BJP office. At the media conference that followed, Sitharaman stressed that the central government did not really have a role to play in regulating such banks except to register them in the first instance.
But, she elaborated, the Centre had nonetheless set up a panel of bureaucrats led by top finance ministry officials to take a hard look at the functioning of multi-state cooperative banks such as the PMC bank and come up with changes to the law or rules that could be made to improve the functioning of such banks.
On the immediate problem that depositors are facing, Sitharaman said she had spoken to the Reserve Bank of India governor earlier.
“Once again this evening, I shall talk to him (RBI governor) and convey the sense of urgency and distress that the clients of PMC have expressed before me and I shall request him to expedite the clearing of or giving permission for withdrawal of their monies which are deposited,” the minister said while addressing the media in Mumbai.
Sitharaman said she will make the phone call to the RBI governor this evening after she returns to national capital Delhi.
The fraud at PMC Bank unfolded following a confession by its former managing director Joy Thomas to RBI that the bank’s exposure to bankrupt Housing Development and Infrastructure Ltd is over Rs 6,500 crore – four times the regulatory cap, or 73% of its entire assets of Rs 8,880 crore.
The police have registered an FIR against HDIL promoters Wadhawans, PMC Bank and its former managing director Thomas.
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