Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that all aspects of Punjab and Maharashtra Co-Operative Bank (PMC Bank) issue are being looked into. " RBI will not allow any co-operative bank to collapse," said Mr Das at a press conference after the Reserve Bank of India's monetary policy committee announced repo rate cut of 25 basis points. Last month, the RBI took the rare step of limiting withdrawals from PMC, causing depositors to besiege the bank's branches to retrieve their money. It also removed lender's managing director Joy Thomas, citing major financial irregularities
Mr Das said that the central bank has acted promptly and swiftly on the PMC Bank issue. For further supervision of the issues at PMC Bank, the RBI is building a different department. "We have announced a cadre of officers who will look after the PMC Bank issue," he added.
Shaktikanta Das further said that the country's banking sector is sound and stable and there is no reason for any panic. Maintaining that cooperative banks are also sound, he said, "one incident cannot be and should not be used to generalise about the health of all cooperative banks."
"The RBI will review all the regulations of cooperative banks and will discuss with the government if required," he said.
On Thursday, RBI raised withdrawal limit for account holders of the PMC Bank to Rs 25,000 from earlier withdrawal limit of Rs. 10,000. Two directors of the real estate firm Housing Development and Infrastructure Ltd (HDIL) that set off the crisis at the PMC Bank were also arrested by the Economic Offences Wing of the Mumbai Police.
Meanwhile, RBI lowered the repo rate by 25 basis points to 5.15 per cent on Friday, maintaining its "accommodative" policy stance in a bid to revive economic growth. That marks the fifth straight reduction in the key lending rate so far this year.
In last four bi-monthly policy decisions, the six-member Monetary Policy Committee reduced the repo rate by 110 basis points. Repo rate is the key interest rate at which the Reserve Bank of India lends short-term funds to commercial banks.
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