No co-operative bank will collapse, says RBI governor

New Delhi, Oct 5 (KNN) The Reserve Bank of India Governor, Shaktikanta Das, has said no co-operative bank would be allowed to collapse.

“RBI, obviously, cannot allow a co-operative bank to collapse. The discussion with the government with regard to regulatory provisions of co-operative banks is an ongoing process,” he said after the Monetary Policy Committee meeting on Friday.

He also appealed the members of public and depositors not to panic or believe speculation in the context of the recent PMC Bank collapse and said, ''The Indian banking sector remains sound and stable. And there is no reason for any unnecessary panic.”

Das further said that one incident isn't enough to raise question on co-operative banking sector health.

''Every incident ‘is an experience’ based on which the RBI will take a fresh look at the regulatory framework in existence and take up any required changes with the government. One incident should not be used to generalise about the health of the co-operative banking sector,” he said.

On September 23rd, the apex banking body put regulatory restrictions on Punjab & Maharashtra Cooperative (PMC) Bank after it found financial irregularities and under-reporting of loans. Soon after, it also superseded the bank’s board to appoint an administrator.

The restrictions included barring the bank from lending and accepting fresh deposits for the next six months apart from capping withdrawals at Rs 1,000 per account, which was later revised upwards to Rs 10,000 and then to Rs 25,000 on Thursday.

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