Financial sector stability & our cook Lilu-tai

PMC Bank cannot create systemic instability but the triumvirate of banks/UCBs, shadow banks and realty firms can play havoc with the Indian financial system

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Joy Thomas, former MD, PMC Bank, claimed the entire responsibility of all the wrongdoing, keeping the bank’s board, its auditors and RBI in the dark, for “fear of reputational loss”

Tamal Bandyopadhyay

6 min read Last Updated : Oct 07 2019 | 12:47 PM IST

Last week our cook Lilu-tai asked me whether her money is safe in her bank. She is 75, can barely sign her name. She is scared that all her savings might get wiped out overnight. Lilu-tai has stopped trusting her bank — a large government-owned, over 100-year old institution. This conversation happened around the same time the Reserve Bank of India (RBI) issued a release saying the Indian banking system was safe and stable.

When was such a release issued last time? In 2008, the RBI had issued a statement when a large private bank (with a small exposure to

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

Topics : Reserve Bank of India financial sector Urban cooperative banks PMC Bank

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