PMC Bank crisis: Financial sector needs governance rehaul, says S&P

The RBI has appointed an administrator and superseded the board of directors at PMC, after the discovery of major financial irregularities

The trouble at Punjab and Maharashtra Cooperative Bank (PMC) highlight a governance deficit in the country's financial sector. Governance and transparency in India's financial institutions lag its larger international peers, according to global rating agency Standard and Poor’s (S&P). 

The Reserve Bank of India (RBI) has appointed an administrator and superseded the board of directors at PMC, after the discovery of major financial irregularities, failures of internal control and systems, and wrong/under-reporting of exposure. 

PMC appears to have exceeded prudential norms in extending loans to a single customer, a distressed real estate company. 

Cooperative banks generally have less onerous regulations.