Multi State Co-op societies don’t come under our Ministry: FM

Union Finance Minister Nirmala Sitharaman has expressed her helplessness in resolving the issue of PMC Bank saying co-op banks do not come under the Finance Ministry. She however, assured that these fall within the ambit of RBI which is keeping a close watch on the situation.

The whole thing started with Sitharaman tweeting a helpline number through PIB for the victims of PMC Bank. In response to her tweet, one of the depositors said he has no option left but to consume poison.

Agitated with this response, the Finance Minister tweeted “I appeal to you not to mention/speak/write of such extreme things. Multi state cooperative institutions do not come under Ministry of Finance, even if they are called banks. @RBI is their regulator and they are taking action.”

In a parallel development, EOW of the Mumbai Police has registered an FIR against some important functionaries of Punjab and Maharashtra Co-operative (PMC) Bank in connection with the scam.

Meanwhile, account holders have been permitted to withdraw a sum not exceeding Rs 10,000 of the total balance.

The bank’s losses since 2008 are Rs 4,355.46 crore, police say. The bank’s former Chairman Waryam Singh, Managing Director Joy Thomas and other senior officials, along with the Director of HDIL, Wadhawan, figure in the FIR.

Meanwhile, the suspended MD Joy Thomas’s letter written to RBI is doing the rounds. The five-page letter reveals how year after year PMC Bank hid its accounts both from the auditors and from the RBI. “We hoped things would normalize soon and Wadhawans would be able to repay their debt”, Thomas says underlining the role Wadhawans played in the early 80s’ in establishing the UCB.

The MD letter also confesses that the bank’s actual exposure to the bankrupt HDIL stands in excess of Rs 6,500 crore, which comes to a whopping 73 percent of the bank’s total loan book.

Meanwhile the shock of the collapse of PMC Bank refuses to subside with share market tanking low once the news came in. There is also a growing distrust of people in the banking system leading RBI to intervene through a press release.

Signed by Yogesh Dayal, Chief General Manager the release reads “RBI would like to assure the general public that Indian banking system is safe and stable and there is no need to panic on the basis of such rumours.”