Strengthen cooperative banks

RBI and govt should not waste the PMC crisis

The Reserve Bank of India (RBI) on Tuesday placed the Punjab and Maharashtra Co-operative Bank (PMC) under “directions”. Consequently, cash withdrawals have been capped at Rs 1,000 per account for six months, and the bank will not be able to extend credit, take fresh deposits or make any payment. Predictably, the decision has resulted in panic among depositors. While the details on why the banking regulator was forced to put such restrictions are still sketchy, the issue is reportedly related to the bank’s exposure to Housing Development & Infrastructure (HDIL). The company has been admitted by the National Company Law Tribunal