Failures of supervision

RBI needs to upgrade oversight capacity

The Reserve Bank of India (RBI) took action last week on the ongoing crisis at Punjab and Maharashtra Cooperative (PMC) Bank, one of the 10 largest co-operative banks in India. The central bank argued that an inspection of PMC Bank’s books had uncovered problems; but, in fact, the co-operative bank’s management had itself come to the RBI last week with its problems, pointing out that they had discovered long-standing bad loans, in particular to Housing Development & Infrastructure Ltd, and would need a resolution plan. The RBI needs to be commended for its swift action after the problem was revealed