Mumbai: The government of India is considering amending laws to curb malpractices at co-operative banks in Asia's third-largest economy, following allegations of fraud in Punjab and Maharashtra Co-operative Bank (PMC), Finance Minister Nirmala Sitharaman said on Thursday.
"If amendments are going to help us curb malpractices, help us in better regulating them, help us in better empowering the regulator itself—the RBI—we would like to do it... if necessary, in the forthcoming winter session of Parliament itself, we will be bringing in any regulation, any amendments, which may be necessitated," Sitharaman said.
The government has asked its economic affairs and banking division to study the activities of multi-state cooperative banks such as the PMC, Sitharaman said.
She also plans to meet the Reserve Bank of India (RBI) Governor Shaktikanta Das later in the day to discuss a faster resolution plan for the PMC.
Bank officials on Tuesday had accused PMC Bank's management of concealing non-performing assets and disbursing loans leading to a loss of at least 43.55 billion rupees ($617 million), adding that the bank camouflaged its financials.
The PMC case has sparked renewed concerns about India's banking sector, which has been rocked by a multi-billion dollar fraud at a state-run lender, the collapse of a major infrastructure lender, bad loan issues at state-run banks and a liquidity squeeze that has hit shadow lenders.
More than two dozen co-operative banks are now under the RBI administration, but PMC Bank - with deposits of 116.2 billion rupees as of March 31 - is by far the largest.
