PMC bank crisis: Congress terms restrictions on cash withdrawal as demonetisation 2.0

Stating that the recent RBI action on the Punjab and Maharashtra Cooperative Bank (PMC) signifies systematic failure than an individual bank failure, Congress on Friday compared the situation with the demonetisation part one.

Calling restrictions on cash withdrawal, specific demonetisation 2.0 for 7 states, Congress spokesperson Professor Gourav Vallabh said that the “action taken by the RBI has placed depositors in the lurch and their hard-earned money is now under threat.”

Saying that RBI’s action suggests that India’s central banking institution is clueless about the real issue, Vallabh asked, “Is this only restricted to the Co-operative Banking system or entire financial service industry? Can RBI emphatically state that this crisis is not going to affect the entire Financial System?”

Addressing press at the Congress headquarters, Vallabh said more than ₹11000 Cr of depositor’s money is in danger of being wiped out.

Seeking answer from the RBI, the Congress leader also asked why companies like HDIL who were defaulting on ₹2500 Crore loan were being extended ₹96 Crore as a personal loan by the cooperative bank.

Demanding that the withdrawal limit must be removed, and customers be allowed to withdraw their money held in deposits, Vallabh also demanded that the FIR must be registered against bank’s directors before they leave the country.

It is worth mentioning that according to RBI data there are 76 Scheduled Co-operative Banks operating in India and among these are 22 State Scheduled banks and 54 Scheduled Co-operative banks. This is much higher than the total number of Nationalised and Private Banks.