Co-op bank regulatory framework likely to be amended: FM

The government will set up a committee comprising two secretaries and a Reserve Bank of India (RBI) deputy governor with an aim of amending the cooperative bank regulatory framework, said the Finance Minister Nirmala Sitharaman recently at the backdrop of the recent developments at the Punjab and Maharashtra Co-operative (PMC) Bank Ltd.

PMC Bank has allegedly enabled financial frauds amounting to Rs.6,500 crore by promoters of Housing Development Infrastructure Ltd (HDIL), putting thousands of depositors and their money at risk. More than two-third of the bank’s total loan book has an exposure to HDIL.

“I have asked secretaries of my ministry, — economic affairs secretary and banking secretary, -to work with rural development and urban development ministries to ensure that multi-state cooperatives, which also run banks to understand where there were shortcomings and look at ways in which different acts have to be amended,” Sitharaman said at a press conference. The Finance Minister said that the revised framework will be submitted in the upcoming winter session of the Parliament.