UCBs with PMC Deposits must be given time for provisioning, NGO writes to FinMin
NGO Sahakar Bharti has written to the Finance Minister, urging the government to amend the Banking Regulation Act to provide full regulatory powers to Reserve Bank of India to regulate all UCBs — scheduled as non-scheduled banks.
Besides smaller UCBs, thousands of housing societies and credit co-operative have accounts with PMCB.
Stating this in a letter to finance minister this week, Nirmala Sitharaman, Sahakar Bharati has urged the government to amend the Banking Regulation Act to provide full regulatory powers to Reserve Bank of India to regulate all UCBs — scheduled as non-scheduled banks, irrespective of whether these are covered under state cooperative law or the Multi-State Co-operative Societies Act. According to the organisation, simply amending the Multi-State co-operative Societies Act will not provide a meaningful solution.
PMCB is currently under an administrator appointed by the central bank which has often criticised the regime of dual regulation of co-operative banks RBI has progressively raised the amount that depositors can withdraw from the banks. While this has benefitted more than 75% of depositors, many depositors — including pensioners, salaried individuals, and small businesses — find their savings stuck with the failed bank.
“A vision document and roadmap for the co-operative banking sector is the urgent need of the hour. A broad-based committee officials from RBI, finance ministry, agriculture ministry and at least two eminent co-operators should be constituted for the purpose,” said the letter signed by Satish Marathe, founder member of Sahakar Bharati, & a director of central board of RBI.
The Economic Offences Wing (EOW) of Maharashtra Police is currently investigating the role played by a handful of bank officials and its largest borrower in defrauding the bank.
Sahakar Bharati has requested the finance ministry to think of different and unconventional measures to redress the hardship faced by all categories of depositors.