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Last Updated : Oct 10, 2019 02:16 PM IST | Source: Moneycontrol.com

Market remains under pressure even as FM assures steps to resolve PMC Bank crisis

"If amendments in Acts help in better regulation, we would like to do it. Will bring in necessary amendments in the winter session of the parliament," the FM said.

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Finance Minister Nirmala Sitharaman's attempt to assuage the concerns of Punjab and Maharashtra Cooperative (PMC) Bank customers seems to have failed to cheer the market as the equity benchmark continued trading 350 points lower.

Analysts said the FM's words could not offer any concrete solution to the issue.

"The solution looks remote. Though it may not have a direct impact on the market, its impact on sentiment cannot be denied," said Sameer Kalra, Founder of Target Investing.

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The Finance Minister Nirmala Sitharaman on October 10 said the government is keeping an eye on the matter and will take legal and legislative steps, if required, to resolve the matter.

The Finance Minister met with some depositors of PMC Bank and explained to them that RBI is taking necessary actions to protect the interests of the customers.

The FM added that the ministry was working with the Rural Development Ministry regarding the matter and has asked the secretaries of concerned ministries to study the shortcomings in detail.

"If amendments in Acts help in better regulation, we would like to do it. Will bring in necessary amendments in the winter session of the parliament," the FM said.

She also said that she will speak to RBI Governor and convey the urgency displayed by PMC Bank customers.

On September 24, PMC Bank said it had been put under directions by the RBI for a period of six months.

When RBI puts a bank under its directions, it is practically taking over the bank's operations.

The management is superseded and the board is dissolved. This happens when the regulator is not satisfied with the bank's functioning and takes the step to safeguard the interest of borrowers.

In PMC Bank's case, it is said that the regulator found irregularities in lending. Underreporting of non-performing assets or higher than permitted exposure to the same group accounts could have led RBI to take the step. An inspection is currently underway.

Meanwhile, RBI Governor Shaktikanta Das recently said that the central bank would not allow a cooperative bank to collapse.

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First Published on Oct 10, 2019 02:15 pm
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