Govt considers stricter laws to curb frauds in co-operative banks: Sitharaman

Galtero Lara
Octubre 10, 2019

Mumbai: The government of India is considering amending laws to curb malpractices at co-operative banks in Asia's third-largest economy, following allegations of fraud in Punjab and Maharashtra Co-operative Bank (PMC), Finance Minister Nirmala Sitharaman said on Thursday. She made the announcement after meeting angry depositors of the bank in Mumbai.

Shares of HDIL extended its losses on Wednesday as it fell almost 5 per cent and hit its lower circuit limit after reports that Mumbai Police's Economic Offences Wing may include the auditors of the bankrupt company in the ongoing probe of PMC Bank scam.

Several customers were protesting outside the BJP office, the venue of her press conference.

"I will once again talk to the Governor of Reserve Bank this evening to convey the distress of PMC clients", Ms Sitharaman. The secretaries, along with a deputy governor-level representative of the RBI, will understand "what is happening, what the shortcomings are, and ways in which acts have to be amended", she added.

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PMC Bank has allegedly enabled financial frauds amounting to Rs.6,500 crore by promoters of Housing Development Infrastructure Ltd (HDIL), putting thousands of depositors and their money at risk.

Meanwhile, on October 7, the Enforcement Directorate conducted fresh searches at a posh bungalow located in Alibaug in Maharashtra in connection with the PMC Bank money laundering case. She stated that the RBI is taking action against the crisis-hit lender's management.

"The Ministry of Finance may have nothing to do with it directly because RBI is the regulator but from my side, I've asked the secretary of my ministry to work together with the Rural and Urban Development Ministry", she said.

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