Money & Banking

PMC Bank: FM urges RBI Governor to expedite payments to worst affected customers

K.R. Srivats New Delhi | Updated on October 14, 2019

Finance Minister Nirmala Sitharaman on Monday urged the Reserve Bank of India Governor Shaktikanta Das to try and expedite payments to “genuinely suffering” customers of the crisis-ridden PMC Bank.

“Even this afternoon, I had a word with the RBI Governor on the PMC Bank matter. He has assured me that he will keep the interests of the customers in mind and at the earliest try to resolve it,” Sitharaman told presspersons after her review meeting with the chief executives of public sector banks (PSBs) here.

The Enforcement Directorate has seized assets relating to the promoters. “The Government has been on its toes to ensure that the legal process does not slow down for want of assets. My appeal to the Governor was if there are adequate assets, is there a way in which RBI can expedite paying customers, who are genuinely suffering,” she said.

Deposit insurance

Sitharaman made it clear that any move to increase the deposit insurance limit beyond Rs 1 lakh would need Parliament’s approval. As regards using the current deposit insurance limit of Rs 1 lakh to pay off suffering customers, Sitharaman cited a technical point, highlighting that a Rs 1 lakh deposit insurance could be invoked only when one treats the matter ( PMC Bank) as a closed case and not as a “going concern”.

“If the attempt is to keep it as a going concern, then you cannot invoke it (deposit insurance) and not give that Rs 1 lakh. This is a hard technical fact. The attempt by RBI is to see if it can be kept going and everybody’s payment is made,” Sitharaman said.

Published on October 14, 2019

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