INSUBCONTINENT EXCLUSIVE:
charge of one of the country's top five co-operative banks on Tuesday brought worried depositors out in protest and sparked renewed
concerns about the health of India's troubled banking sector.Depositors of the Punjab and Maharashtra Co-operative (PMC) Bank were
has been put under the direction of the central bank and barred from renewing, or granting any loans, or making investments without prior
approval of the RBI.The sudden move led to protests and long queues outside the bank's branches
It has 137 branches that are spread across seven states in India."My money is gone now," said Ashok Mahto who stood outside a bank branch in
Santacruz, a suburb of Mumbai city, convinced that the Rs 65,000 that had taken him six months to accumulate had been lost forever
Thousands of depositors across various branches stood outside demanding answers on their life savings.(PMC's plight has also raised new
But with curbs on withdrawals, she felt helpless."We need money urgently for the medical surgery of my mother-in-law and we can't withdraw
our own money," she said.India has more than 1,500 small urban co-operative banks that typically service small local communities in certain
districts or states.Over two dozen of these co-operative banks are now under RBI administration, but PMC Bank - with deposits of Rs 11,617
31.)Depositors at co-operative banks are in a relatively higher risk zone as the supervision and administration of these entities falls
under state governments and the central bank.The central bank cannot take any action against the banks unilaterally but can suggest a plan
to the state government which has the ultimate authority to decide if the bank should continue operations or be shut down.PMC's plight has
also raised new fears about the broader banking sector that 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.The public
sector bank index, which surged as much as 10.4 per cent over two trading sessions following a government announcement of a big cut in
sector banks permanently also spooked markets and the public, forcing the central bank to refute the rumours on social media.PMC Bank itself
sought to calm depositors and Managing Director Joy Thomas, in a text message to customers on Tuesday, attempted to reassure them that the
bank's issues would be resolved within six months.Still, depositors remained unconvinced and bank employees were despondent."Our staff has
worked hard to win the confidence of clients over the years
After this incident, it'll be very difficult to revive that confidence," said Sonia Malik, a branch manager at a PMC Bank outlet in Delhi,
adding employees were worried about their jobs too.Get Breaking news, live coverage, and Latest News from India and around the world on
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