OPEN APP
Home / Industry / Banking /  Indian banking system safe, stable, RBI assures depositors second time in a week

The Reserve Bank of India has assured the general public that Indian banking system is safe and stable. The RBI's assurances come in the wake of rumours about certain banks, including cooperative banks. The RBI has urged the public not to panic.

"There are rumours in some locations about certain banks including cooperative banks, resulting in anxiety among the depositors. RBI would like to assure the general public that Indian banking system is safe and stable and there is no need to panic on the basis of such rumours," the RBI said in a tweet.

This is the second such assurance from the RBI. On 26 September, RBI had tweeted: "Rumours are being circulated in sections of social media about operations of banks to create panic among the public. All are advised not to fall prey to such baseless and false rumours."

RBI's assurances comes in the wake of the Economic Offences Wing (EoW) of Mumbai Police registering a police complaint against the senior management of Punjab and Maharashtra Co-operative Bank (PMC) on Monday for hiding non-performing assets and disbursing loans that led to a loss of 4,355 crore for the lender.


The RBI last week took charge of the bank and suspended the bank's board. The bank has been barred from renewing, or granting any loans, or making investments without prior approval of the RBI.

The RBI has placed curbs on withdrawals from PMC, prompting protests among thousands of PMC's depositors, whose funds have been largely frozen.

Reuters reported that more than two dozen co-operative banks are now under RBI administration, but PMC Bank - with deposits of 11,620 crore as of March 31 - and among the top five co-operative banks in the country, is by far the largest to be hit by such RBI measures.

India has more than 1,500 small urban co-operative banks that typically service small local communities in certain districts or states.

Banking shares have seen strong selling pressure in three sessions. The banking index, Nifty Bank, has suffered 4% loss in three sessions. (With Agency Inputs)

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
Get alerts on WhatsApp
My ReadsRedeem a Gift CardLogout