PMC Bank crisis: One incident can't reflect health of entire system, says RBI Governor Shaktikanta Das

Reserve Bank of India (RBI) Governor Shaktikanta Das has said the Indian banking system is sound and stable and one incident at a co-operative bank (PMC Bank case) did not reflect the health of the overall system. He also advised the public and depositors to not pay much attention to unnecessary rumours.

"So far as the RBI is concerned, I would like to make it very clear that the banking system remains sound and stable and there is no reason for any panic," Das told reporters after the fourth bi-monthly monetary policy announcement.

Defending the RBI's action in the Punjab & Maharashtra Co-operative Bank (PMC) case, Das said the central bank acted very swiftly. "We have appointed the administrator, reviewed the liquidity position, complaint filed in Economic Offences Wing (EOW). One incident should not be used to generalise about health of co-operative banks," he said.

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Das said the RBI would review all the regulations of cooperative banks and discuss with the government if required.

On September 23, the RBI had imposed regulatory restrictions on the PMC Bank for six months. The withdrawal limit for account holders was also kept at Rs 1,000 for six months, which was revised upwards to Rs 10,000 and then again to Rs 25,000. The central bank also superseded the board of the crisis-hit bank and appointed Jai Bhagwan Bhoria as the new administrator of the PMC Bank.

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On Thursday, the EOW of the Mumbai Police arrested HDIL promoters Rakesh Kumar Wadhawan and Sarang Wadhawan in connection with the PMC Bank case. The agency also attached properties worth Rs 3,500 crore. Rakesh is the executive chairman of HDIL, whereas Sarang is the managing director of the company. Both of them were quizzed by the EOW SIT (Special Investigation Team) on Thursday but they did not cooperate, following which the police arrested them.

Edited by Chitranjan Kumar