Govt considers stricter laws to curb frauds in co-operative banks: Sitharaman

Marco Green
October 10, 2019

Finance Minister Nirmala Sitharaman said she will speak with the RBI Governor this evening over the distress of depositors of Punjab Maharashtra Co-operative (PMC) Bank. She also said a committee will be formed to look into issues pertaining to multi-state cooperative banks.

According to reports, the Mumbai Police's Economic Offences Wing may expand its probe into the PMC Bank fraud case and the auditors of the Housing Development and Infrastructure Ltd (HDIL) might be included under it.

Sitharaman said rural cooperative banks were registered under the Rural Development Ministry and urban ones under the Urban Development Ministry.

The regulatory action on the Punjab & Maharashtra Cooperative (PMC) Bank was imposed on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various off-site surveillance reports to RBI that came to the it's notice last month.

"I have explained to the affected customers this but also told them that this doesn't mean the government of India is doing nothing about it". So when the banks are found indulging in malpractices, the RBI is responsible for the professional handling of the matter, she said.

"I have asked secretaries of my ministry - economic affairs secretary and banking secretary-to work with rural development and urban development ministries to ensure that multi-state cooperatives, which also run banks to understand where there were shortcomings and look at ways in which different acts have to be amended", Sitharaman said at a press conference in Mumbai today. She added that the government would try to pass any amendments needed in the upcoming Winter Session of Parliament.

Other reports by Click Lancashire

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