PMC Banking Fraud and its Impact on Customer

in #india3 years ago

PMC Bank customer are in panic situation with thought in their mind that what will happen to their money. As demonetization decision of current government shows that not to keep money at home. current government started bank account opening initiative in India with aim that every Indian must have bank account but money in bank is also not safe as we have seen with PMC bank crisis.

I am continuously following the news of PMC Bank crisis over Internet, there are so many account holder who put all their life saving in PMC bank with aim to get higher rate of interest every month, As Co-Operative Banks offer more rate of interest as compare to other private and public sector bank.

What went Wrong with PMC Bank ?

Co-operative banks function like other public and private sector bank and provide all facility which public and private sector bank provide. Co-operative banks follows all guideline of RBI but not in close observation of Reserve Bank of India. RBI monitor Public and Private Sector banks very closely but for co-operative bank there is single department in RBI. PMC bank intentionally hide their NPA (Non-performing Asset) with fake transaction and recent withdraw of huge money grab he attention of RBI which resulted ban of transaction.

HDIL have biggest amount loan from PMC bank. which is a construction company almost bankrupt, hiding the NPA is a crime if a any bank does it. Mumbai police also registered case of fraud on PMC bank and HDIL.Corporate Lending have high risk high return. Corporate Lending is like keeping all your egg in single basket that the wrong thing PMC bank did like Yes bank.

Do we have need of Co-operative Banks

As per current banking system in India we have no need of co-operative bank. I think we have enough number of Private and Public sector Banks which can fulfill requirement of banking need of every Indian even at rural level. co-operative banks provide higher rate of interest than private and public sector bank due to this most of people keep their money in co-operative banks.

Is RBI is Culprit in PMC Bank Crisis?

As per my opinion, yes because co-operative bank crisis not new in India. It is RBI responsibility if co-operative bank not disclosing its actual financial information to its customer. RBI has to release circular as they did but very late. keeping single department inside the RBI body to monitor co-operative bank is not enough either RBI make tough rule for co-operative bank or shut down so that people only keep their money in Private or Public sector bank.

What will Happen to PMC Bank and Customer?

If PMC bank Balance Sheet not in much loss which is very difficult to assume then any Private sector bank may consider to take over PMC bank but all depend on balance sheet. if PMC bank can recover its loan amount from HDIL in that case all bank holder can get their money. If PMC unable to recover loan then in that case PMC bank account holder may get up to Rs.1 Lakh. under Depositor Insurance Guarantee Scheme.This scheme cover all amount of customer saving, FD and recurring deposit.customer will only get money if bank closed.

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