After Punjab & Maharashtra Cooperative (PMC) Bank Mess, What's In Store For Bank Account Holders?
GUWAHATI: It will to be too early to set the alarm bells ringing, but the signals emanating from Indian Banking System are not very encouraging.
The limitation to the withdrawal limit of crisis-hit Punjab & Maharashtra Cooperative (PMC) Bank customers is a pre-cursor to the ailment which plagues Indian banking system.
Irregularities in Public Sector Banks are an open secret, the mounting Non Performing Assets (NPA), the misbalance in CASA deposit should be a reason of worry for all bank account holders.
CASA is the amount of money that gets deposited in the current and savings accounts of bank customers. It is the cheapest and major source of funds for banks. The savings accounts portion pays more interest compared to current accounts.
The Reserve Bank of India yesterday, had barred the PMC Bank from carrying out almost all its routine banking activities for six months. It had allowed depositors to withdraw only Rs 1000 from any of their accounts. The crackdown caused panic among depositors. But seeing panic among depositors apex bank raised the limit to Rs 10,000 by evening.
"The above relaxation has been granted with a view to reducing the hardship of the depositors. The Reserve Bank is closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank," RBI said in a statement.
RBI’s move came after the central bank found slew of irregularities in the accounting system of the banks. The banks board of directors have also been sacked.
The 35-year-old bank is a multi-state cooperative bank with operations in Maharashtra, New Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. With a network of 137 branches, it ranks among the top 10 cooperative banks in the country, leading news agency said.
If this news is not enough, the country’s largest lender State Bank of India has been downgraded by an international rating agency Morgan Stanley from overweight to equal weight mentioning concerns about its asset quality. The shares of SBI tanked more than seven per cent and are expected to go down further.
International agencies based their ratings on findings of their survey and monitoring of the activities of a firm on a regular basis.