'Banking system sound and stable': RBI Governor on PMC Bank crisis

Reserve Bank of India (RBI) Goverr Shaktikanta Das on Friday said that banking system is sound and stable, and one incident at a cooperative bank should t be used to generalise health of entire financial system. On September 23, RBI h put restrictions on Punjab & Maharashtra Cooperative (PMC) Bank after it h found out financial irregularities, and under-reporting of loans given to real estate developer HDIL.

Goverr responds to PMC crisis

curbs included barring bank from lending and accepting fresh deposits for next six months apart from capping withdrawals first at Rs 1,000 per account which was later revised urds to Rs 10,000 and n again to Rs 25,000. "So far as RBI is concerned, I would like to make it very clear that banking system remains sound and stable and re is reason for any panic," Das told reporters after fourth bi-monthly monetary policy anuncement. He was responding to a slew of questions on how RBI was caught napping as scam at leing cooperative bank was going on for around eight years and its exposure to HDIL was over 73% of its total book and that too account h been an NPA for long.

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"RBI acted swiftly"

He also vised people t to pay much attention to unnecessary rumours that can create a panic situation. On PMC scam, Das said RBI acted very swiftly and promptly after it was brought to its tice. Maintaining that cooperative banks are also sound, he said, "one incident cant be and should t be used to generalise about health of all cooperative banks." RBI will review all regulations of cooperative banks and will discuss it with government if required, he said.

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