Post PMC scam, RBI board discusses functioning of co-operative banks

The RBI Central Board on Friday reviewed functioning of the urban cooperative banks and enforcement framework in the backdrop of scam in the Punjab and Maharashtra Cooperative (PMC) Bank affecting lakhs of depositors.

The Central Board headed by RBI Governor Shaktikanta Das also discussed the current economic situation, as well as the domestic and global challenges facing the country, the central bank said in a release.

"The Board's discussions focussed on issues related to urban cooperative banks, extension of enforcement policy and framework to cooperative banks and NBFCs (non-banking financial companies)," it said.

Following exposure of scam in the PMC Bank, which had over 9.15 lakh depositors, the RBI had imposed restrictions on withdrawals.

Statutory inspection of PMC by the RBI had revealed large group exposure toward Housing Development and Infrastructure Ltd (HDIL) Group companies to the tune of about Rs 6,226.01 crore (inclusive of interest accrued in the related accounts).

Out of the total exposure of Rs 6,226.01 crore at the end of March 2019 to the HDIL group, only Rs 439.58 crore was disclosed to the RBI and remaining Rs 5,786.43 crore remained undisclosed.

The RBI release further said the report on trend and progress of banking in India for the year 2018-19 and other policy and operational issues.

RBI Deputy Governors N S Vishwanathan, B P Kanungo and Mahesh Kumar Jain and other directors of the Central Board -- N Chandrasekaran, Bharat Doshi, Sudhir Mankad, Manish Sabharwal, Ashok Gulati, Prasanna Kumar Mohanty, Satish Marathe, Swaminathan Gurumurthy and Revathy Iyer, attended the meeting.

Union Finance Secretary Rajiv Kumar also attended the meeting.