Amid PMC crisis, RBI says Indian banking system stable

Allaying fears of a crisis in the country’s banking system, the Reserve Bank of India (RBI) on Tuesday said that Indian banking system is safe and stable and there is not need to panic on “rumours”.
The statement comes against the backdrop of the revelation of fraud in Punjab & Maharashtra Cooperative (PMC) Bank involving the Housing Development and Infrastructure Limited (HDIL).
Banking System Safe & Stable “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.
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. — ReserveBankOfIndia (@RBI) October 1, 2019 Among other violations, the PMC bank opened a number of dummy accounts to replace the stressed accounts held by Wadhawans-led HDIL.
Also Read RBI hikes withdrawal limit in PMC Bank to Rs 10k In a letter to Reserve Bank of India (RBI) , the tainted bank’s now-suspended Managing Director Joy Thomas admitted to large-scale wrong-doings and the cover-up exercise.
He said that in 2011, the size of the bank was around 57 branches, with deposits of Rs 2,824 crore and advances of Rs 2,000 crore. The exposure of the HDIL group was then Rs 1,026 crore.