The government and the regulator are doing a great disservice to depositors by permitting the MD to put out half-truths. Ideally, we need answers from the government. Also, like in the case of Infrastructure Leasing & Financial Services (IL&FS), we need to change management, sack those who were responsible and act fast to salvage public funds. 
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
See law Makers have passed laws in their favour ( Anarchists). They forget it can bounce back on them. Public is so docile no one challenges till dark days come .
A) Abdulah father made law Public Safety Act (PSA). Anyone can be taken under PSA ( not defined PSA) for 3 years . Now see His son Abbdullah 3 times CM is under house arrest & can't even challenge
B) Custodial interrogation . A British era rule . No gravity if offence defined for custodial interrogation . Now see PC cooling heels in Tihar & eating same food + floor . Pawar + Vadra + Maya + Akihlesh extra may join bandwagon
C) Banking laws . It is a trade off between customers & banks . No other third party is signatory for FD extra. Then how can your money be controlled by RBI. Insurance why of only one lakh . Your full Money should be ensured & RBI/ Government has to ensure security & safety of your funds as Specified in role of RBI and RBI is agent of government.
Then how can your money be wiped off
Because no one has challenged so far & noone has filed FIR/PIL.
Right to property is your fundamental right & government cannot enact any act violation to it.
It is not will of government to pass any draconian law as per wish.
It is duty of opposition + constitutional authorities + public that Fundamental laws are not violated
The annual audited statement of accounts gives a true picture and the regularities of filing the papers as per statutory norms might have been done, if so no restrictions even after the alarming bell raised is definitely a failure of the concerned authority.
M G Warrier
Letters
September 26, 2019
Banking crisis
This refers to your editorial “Co-operative crisis †(September 26). This time around, one is afraid, the inept handling of PMC Bank mess may have an impact on the trust people had in the Indian Banking System since 1960’s. With the nationalization of major commercial banks (1969) and extension of coverage of the Banking Regulation Act to cooperatives (1966), common man believed that someone is in control of the banks in India and his savings deposited in banks were safe.
Obviously, the action initiated by RBI imposing restrictions in the functioning of the PMC Bank is with good intentions and aimed at protecting the interests of bank’s depositors. One objective of imposing a ceiling on withdrawal from deposit account with the bank is to guard against panic withdrawals which may cause a run on the bank. Fair enough. The ceiling of Rs1000 during the coming 6 months, possibly the result of a ‘cut and paste’ approach to drafting directions needs immediate review More transparency in such measures is needed, as today, the public trust in the financial system is not very high. The inadvertent efforts to destabilize the institutional system including the limbs responsible for regulation and supervision have also contributed to the present unenviable situation. The laws applicable to primary (urban) cooperative banks with multi-state presence and large clientele need immediate overhaul. “Cooperatives†remaining a state subject should not come in the way of regulating cooperative banks under the provisions of B R Act.
A related issue is, for the savers, the statutory provisions stipulating capital and reserves requirements including maintenance of liquid assets and the existence of deposit insurance (with a ridiculously low limit of Rs one lakh per account, though) are not found helpful in such situations. In this context, just as RBI has got its Economic Capital Framework (ECF) studied by an expert group chaired by former RBI governor Dr Bimal Jalan, GOI and RBI may consider appointing a panel of experts to study the capital and reserves framework of all banks including cooperative banks. The expert panel may also make suggestions on maintaining a national deposits protection fund under the aegis of DICGC to provide immediate relief to depositors in situations like this. A wholesale review covering adequacy of capital, liquid assets and reserves and realignment of their components may prove beneficial to the economy, as the exercise may release liquidity into the market.
M G Warrier, Mumbai
Punish Managers + admin + board + RBI + FM official
Obviously, the action initiated by RBI is with good intentions and aimed at protecting the interests of bank depositors including the PMC Bank clientele. One objective of imposing a ceiling on withdrawal from deposit account with the bank is to guard against panic withdrawals which may cause a run on the bank. Fair enough.
More transparency in such measures is needed, as today, the public trust in the financial system is not very high. The inadvertent efforts to destabilize the institutional system including those responsible for regulation and supervision have also contributed to the present unenviable situation.
Considering the multi-state presence and large clientele with a deposit base of over Rs11,000 crore, RBI need to quickly review the withdrawal limit of Rs1000 fixed for 6 months in the case of PMC Bank. More important, the message that the present action is in the interest of the stakeholders, including depositors, of the bank has to be publicized.
A related issue is, for the savers, the statutory provisions stipulating capital and reserves requirements including maintenance of liquid assets are not found helpful in such situations. In this context, just as RBI has got its Economic Capital Framework (ECF) studied by an expert group chaired by former RBI governor Dr Bimal Jalan, GOI and RBI may consider appointing a panel of experts to study the capital and reserves framework of all banks including cooperative banks. The expert panel may also make suggestions on maintaining a national deposits protection fund under the aegis of DICGC to provide immediate relief to depositors in situations like this. A wholesale review covering adequacy of capital, liquid assets and reserves and realignment of their components may prove beneficial to the economy, as the exercise may release liquidity into the market.
M G Warrier, Mumbai
Don't you think bankers & admin have failure in their duty
Huge loss NPA who is going to infuse .
No one
customers & bank kyc norms is contract & trust
Why bankers have broken trust
PMC
It is a cooperative bank by the people for the people of the people.
Money in saving & FD is their hard earned money.
Depositors never create NPA. The NPA is created by bankers & administrator of banks .
Then how can customers can be harassed .
It is main role of RBI
Regulator and supervisor of the financial system: lays out parameters of banking operations within which the countryâ€s banking and financial system functions for-
A) maintaining public confidence in the system, B) protecting depositors’ interest ;
C) providing cost-effective banking services to the general public.
Regulator and supervisor of the payment systems:
A) Authorises setting up of payment systems;
B) Lays down standards for working of the payment system;
C)lays down policies for encouraging the movement from paper-based payment systems to electronic modes of payments.
D) Setting up of the regulatory framework of newer payment methods. E) Enhancement of customer convenience in payment systems.
F) Improving security and efficiency in modes of payment.
Points to ponder
1)The customers in no way connected to RBI
2) The contract for saving account & FD extra is with bank & customers.
RBI is not a part of contract
3) Then how can third party( RBI) enter into privacy & functioning
4)The NPA is not created by customers. It is by
Bankers + Administrator + Regulator due to Dereliction of duties.
5) Thus as per law of land no loss can be born by customers . If rules or laws have been made favouring bankers & regulators then it amounts to Illegal monetary monopoly practices
6)Finally RBI is bankers if bankers & Agent of government then
No restrictions can be laid on customers money . Loss if any due to Dereliction if duties then bankers + administrator should be held responsible & Finally if government agent RBI has failed then it is duty of Government to reimburse money to customers & recover from defaulters A) maintaining public confidence in the system, B) protecting depositors’ interest ;
C) providing cost-effective banking services to the general public.
1) maintaining public confidence in the system, 2) protecting depositors’ interest ;
3) providing cost-effective banking services to the general public.