Centre closely monitoring PMC Bank developments: Nirmala Sitharaman

Nirmala Sitharaman

Nirmala SitharamanThe Union Finance Minister Nirmala Sitharaman on Monday said she is monitoring the developments at Punjab and Maharashtra Co-operative (PMC) Bank very closely, and the Reserve Bank of India Governor Shaktikanta Das has given assurance on protection of customers’ interest.

The lender was kept on under “directions” by the Reserve Bank of India (RBI) last month because of weak financial health, wherein the apex  bank has locked the deposit withdrawals at Rs 25,000.

“The RBI governor has assured me that he will keep the interest of customers in mind, and at the earliest try resolve and resolve it…I had discussion with RBI Governor this afternoon and I am closely monitoring it,” said Sitharaman while addressing media after meeting CEOs of public sector banks here.

PMC is under financial crisis allegedly due to its alliance to near-bankrupt realty player HDIL, to which it has loaned over 70 percent of its Rs 9,000 crore in advances.

“Government has been on its toes in terms of bringing the assets of these promoters (indulged in fraud) of the bank…process will not suffer for want of enough assets which can eventually help paying back customers. In fact my appeal to Governor this afternoon was if there are so many assets, is there anyway RBI can expedite in terms of paying to customers who are genuinely suffering,” she said.

Besides, the centre may think about raising deposit guarantee limit from existing Rs 1 lakh.

If it happens it will be done through Parliament, she added.

Deposit Insurance & Credit Guarantee Corporation (DICGC) guarantees each depositor in a bank up to a maximum of Rs 1 lakh for both principal and interest as on the date of liquidation/cancellation of the affected bank’s licence or from the date of amalgamation/merger.

She also had a discussion with the RBI Governor regarding instant releasing of Rs 1 lakh deposit guarantee. 

However, she was informed by the governor that the deposit guarantee is released only after the bank is closed.

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