Though we have already brought before our readers various demands put up before Nirmala Sitharaman, Finance Minister by the visiting Sahakar Bharati team on UCB scenarios in the country in the wake of PMC Bank debacle, here is the actual letter written to her and forwarded by the team to Indian Cooperative.
Hon Smt Nirmala Sitharaman,
Finance Minister
Govt of India,
New Delhi
Namaskar,
At the outset, we thank you very much for sparing time from your busy schedule and giving Sahakar Bharati Team – Shri Satish Marathe, Founder Member, Sahakar Bharati (SB) & Director, Central Board, Reserve Bank of India (RBI), Shri Rameshji Vaidya, Ntl President, SB, Shri Jyotindra Mehta, Vice President, SB & Shri L N Gupta, Ntl Sampark Pramukh, SB an opportunity to express our views and concerns about the failure of Fraud Afflicted Punjab & Maharashtra Coop Bank Ltd, one of the largest Scheduled Urban CoOp Bank in the country.
We are happy that once the fraud was noticed, the Reserve Bank of India, the Finance Ministry, GOI and the Economic Offences Wing (EOW) of Maharashtra Police swiftly initiated action to protect the interests of the Depositors.
All the same, due to the fraud perpetrated on innocent and unsuspecting Depositors, both Individuals and Institutions have been taken for a ride and as a consequence of the fraud. CoOp Sector Institutions in particular have suffered a Big Jolt as Deposits of over 100 Urban Coop Banks, over 15000 Housing Socs and a few thousand Credit CoOp Socs are facing an Unprecedented Challenge which may result in failure of some of them due to Cascading Effect.
Looking to the grim situation, we have to suggest as follows
1a. Amend Banking Regulation Act to provide full regulatory powers to RBI to regulate all Urban Coop Banks viz. all Scheduled and Non Scheduled, irrespective of their being registered under respective State CoOp Act or the Multi State CoOp Socs Act. Simply amending Multi State CoOp Socs Act will not be enough.
1b. Vision Document and a Roadmap for Coop Banking Sector is the urgent need of the hour. A broad based Committee of Officials from the Reserve Bank of India, the Finance Ministry, GOI and Agriculture and Coop Ministry, GOI and at least two eminent CoOperators be constituted for the purpose.
- As reported in Media over 100 Urban CoOp Banks, over 15000 Housing Socs and a few thousand Credit CoOp Socs besides individual depositors have been affected by the Fraud in Punjab & Maharashtra Coop Bank Ltd and hence, an Out of Box Solution is necessary.
- Urban Coop Banks be given sufficient time to make Provisions depending upon their Profitability for the last 3 years.
- A Cell or a Desk be created for CoOp Financial Institutions in the Department of Banking and Finance Services, Ministry of Finance, GOI
Before concluding, we once again appeal to you –
- To give full Regulatory Powers to RBI to regulate all Urban Coop Banks, Scheduled and Non Scheduled, irrespective of their being registered under respective State CoOp Acts or the Multi State CoOp Socs Acts, and
- Kindly intervene and guide to formulate an OUT OF BOX solution to redress the hardships being faced by all categories of Depositors and the CoOp Sector
- At least 2 CoOperators be inducted on the Committee constituted by the Ministry of Finance, GOI to consider amending related enactments.
Thanking you.