The top representative of urban cooperative banks in India, Jyotindra Mehta sought time and met the second top man in the govt, Union Home Minister Amit Shah seeking the latter’s intervention in the PMC Bank matter.
Accompanied by D Krishna, former Nafcub Chief Executive and a banking expert, Mehta held one and half an hour-long meeting with the Home Minister on the issue. “I know he is not a Finance Minister but I also know that he is an ace cooperator who has the experience in salvaging Madhavpura Mercantile Bank which was caught in more or less a similar situation”, said Mehta to Indian Cooperative explaining the reason behind him meeting Shah.
Mehta’s major focus was restoring normal banking operations at PMC Bank. Actually, it boiled down to recovering the bad loans. ED has been able to attach a huge asset from the defaulter HDIL but converting them into liquidity is time taking, underlined Mehta.
Our purpose of meeting the Minister was aimed at seeking his intervention in prodding the ED into carrying through the process of sale of assets as soon as possible. Once, the lost money is back to the bank, even RBI will have no objection restoring its original status, stated Mehta who is the President of the apex body NAFCUB and also the Patron of Sahakar Bharati.
One of the solutions that we brought forth before the Minister was that DICGC should give Rs 2000 crore to the PMC Bank till the process of recovery is underway, said Mehta, adding that this infusion of fund would make the PMC bank’s net worth positive.
Before meeting the Minister, Mehta has also contacted Manmohan Singh, a representative of Gurudwara Committee, seeking his support in not withdrawing money for 2-3 years from the PMC Bank. “I am not sure but according to an estimate Gurudwaras have about Rs 800-900 crore invested in PMC Bank; I am happy to note Singh’s reaction who promised to talk to everyone concerned and get back”, said Mehta.
Seized of the PMC Bank’s issue, Nafcub have been working overtime to resolve the issue. The leaders have been contacting institutional investors of PMC Bank and seeking their commitment not to seek money from the bank for 2-3 years, as desired by the new administrator of the UCB also.
The cooperative sector has about Rs 500 cr locked in PMC Bank and these include credit co-ops, urban co-op banks, co-op housing societies. “I have a guestimate that about Rs 3500 crore has been committed in the PMC Bank by institutional investors and if they cooperate, making the bank functional again should not be difficult”, said Mehta.
Nafcub, sources add, is also mulling over the idea of approaching ARCIL which buys bad loans and recovers them for the client for a fee.