Sitharaman says committed to reform cooperative banks

In the wake of the crisis at Punjab & Maharashtra Cooperative (PMC) Bank, finance minister Nirmala Sitharaman on Tuesday reiterated the government commitment to rein in cooperative banks by bringing in necessary legislative changes. She said the finance ministry and RBI officials had three meetings since the PMC Bank crisis and the effort is to bring back the confidence of the depositors in the nation's banking system.

"Where there is a necessity, we will bring in amendments to the law in such a way that when you call yourself a bank, you have to be governed by the principles of the Banking Regulation Act," Sitharaman said, speaking at The Indian Express' 'Adda' event this evening. She, however, said the government is not coming up with a complete solution immediately but it is moving towards better supervision and regulation for cooperative banks.

"I am not indicating that everything is going to shake up or disruptive. I am only saying that we are looking at ways to ensure the confidence of the public in banks," she said. She said at the meetings, government and RBI discussed the ways to make sure that financial institutions are the best possible manner so that the depositors have confidence in parking his money in banks.

The government is also having discussions on hiking the deposit insurance from Rs 1 lakh and that a decision will be taken after proper due diligence. She said the government would not like any other institution to fail like the Jet Airways or IL&FS and ruled out any asset quality review of NBFCs..