- Currently, UCBs have more relaxation in regulation compared to SFBs
- As of now, no powers are available with RBI for constituting boards of UCBs, removal of directors, the supersession of BoDs, auditing of UCBs and winding up and liquidation of UCBs.
New Delhi: PMC Bank crisis has made depositors worrisome. Seeing the condition of PMC bank customers, people have become worried about their own deposits in banks. Punjab & Maharashtra Cooperative Bank (PMC Bank), among the top 10 urban cooperative banks in the country, was placed under an RBI administrator on September 23 for six months due to massive under-reporting of dud loans.
RBI had imposed withdrawal restrictions on account holders after it found alleged irregularities to the tune of Rs 4,355 crore due to diversion of money to infrastructure firm HDIL. Recently, SBI Research suggested several points to implement to avoid PMC Bank like crisis.
SBI Research says in its recent Ecowrap report, “The Indian financial system’s regulatory architecture has its complexity – both in terms of the sheer number of regulating bodies and also because of their overlapping spheres of concern and influence. An example of this is the regulation of cooperative banks in India with their regulation largely left to the registrar of cooperatives.”
“Though RBI has…