RBI should be given full power to regulate co-op banks: Marathe

RBI Central Board Director Satish Mara has asked government to give full powers to Reserve Bank of India to regulate all urban cooperative banks in wake of lakhs of depositors facing hardship in withdrawing ir entire sum from scam-hit PMC Bank.

In a letter to Finance Minister Nirmala Sitharaman, Mara also suggested that a bro-based committee should be set up to prepare a vision document and a ro map for cooperative banking sector. He also said committee should constitute officials from Reserve Bank of India (RBI), finance ministry, agriculture ministry, and at least two eminent co-operators. Mara also raised se issues during his recent meeting with Sitharaman.

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"Amend Banking Regulation Act to provide full regulatory powers to RBI to regulate all urban co-op banks viz. all scheduled and n-scheduled, irrespective of ir being registered under respective state co-op Act or multi-state co-op societies Act," said his letter to minister.

He ded that simply amending Multi State Cooperative Societies Act will t be eugh. On Friday, Sitharaman told reporters that government would bring a legislation to effectively regulate cooperative banks so that y also follow prudential rms applicable for commercial banks. He furr said government should find "out-of-box" solution to redress hardships being faced by all categories of depositors and cooperative sector.

He also said once fraud at Punjab and Maharashtra Cooperative Bank (PMC) was ticed, RBI, finance ministry and Ecomic Offences Wing (EOW) of Maharashtra Police swiftly initiated action to protect interests of depositors. PMC, which is among top-10 urban cooperative banks, was placed under an RBI-appointed ministrator on September 23 for six months due to massive under-reporting of dud loans.

bank, over a long period of time, h given over Rs 6,500 crore in loans to HDIL, which is 73 per cent of its total vances, and which has turned sour with a shift in fortunes of w-bankrupt company. Its total loans stand at Rs 8,880 crore and deposits at over Rs 11,610 crore. re have been massive protests across city from depositors following RBI action. scam has affected lakhs of customers who are facing difficulties in  withdrawing ir entire money due to restrictions imposed by RBI. 

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