He added the RBI was in talks with the government to tighten regulations governing cooperative banks since some of them were facing crises. “A department has been formed and we are building a team to supervise these banks,” said Das.
Last month, a whistleblower raised an alarm over alleged irregularities at the Mumbai-based PMC Bank. The RBI appointed an administrator and sacked the management. It also limited withdrawal amounts and banned credit disbursal. The withdrawal limit was extended to Rs 25,000 on Thursday.
Former PMC Managing Director Joy Thomas has confessed to the RBI that 70 per cent PMC Bank’s loan book is exposed to one Mumbai-based realty group — Housing Development and Infrastructure (HDIL). The police on Thursday arrested HDIL promoted Rakesh Wadhwan and his son Sarang Wadhwan. Thomas was arrested on Friday.
Asked why the RBI, which carries out annual inspection of all cooperative banks, was not able to identify the problems, Das said all aspects of the PMC Bank was being looked into.
“As far as fixing responsibility for the PMC scam is concerned, we are looking into it,” said Das adding that he would not be able to provide details as the matter was being investigated.
He added, “Cooperative banks develop problems because of various factors. The discussion with the government on the amendment of regulations of cooperative banks is an ongoing process.”
The RBI governor said after the experience with the PMC Bank, the regulator would take a relook at the existing regulatory framework. “If any changes are required, we shall take them up with the government
PMC Bank is the 24th cooperative bank to be placed under RBI administrators in 2019. Urban cooperative banks are registered as cooperative societies either with the State Cooperative Societies Act or the Multi-State Cooperative Societies Act, 2002, and are regulated and supervised by the Registrar of Cooperative Societies of the respective states or by the Central Registrar of Cooperative Societies.
On the overall crisis in the non-banking financial company (NBFC) sector, Das said, “The RBI’s endeavour is to ensure that we do not encounter failure of another large systematically important NBFC. We are monitoring it. Wherever required, we are calling the management of those NBFCs, having a dialogue with them, and finding out how to resolve issues.”
He said in some cases the banks were also signing inter-creditor agreements according to the 7 June circular and trying to restructure loans.
With inputs from PTI