Lessons from PMC: Why govt is responsible for co-operative bank crises

At no time has it made customers aware of any additional risk in such banks, over scheduled commercial banks

It is a month now that the Reserve Bank of India (RBI) has suspended the fraud-ridden normal functioning of the Punjab and Maharashtra Cooperative (PMC) Bank. The RBI has appointed an administrator who, with all due respect to his other skills, has not run a bank, far less a bank that has been hit by a massive fraud. His job, assisted by three others bankers, is not to find a solution, but follow procedure. If the past is any guide, this will turn PMC Bank into a zombie bank, neither living, nor dead.

I gather that some Rs 27 crore a