Days after the PMC Bank came under scanner for alleged frauds, the RBI Governor Shaktikanta Das on Friday said that all was well with the banking system and one incident could not reflect the health of the overall system.
He advised the public and depositors to not believe in rumours.
“The Indian banking sector remains sound and stable and there is no reason for any unnecessary panic. In fact, sometimes unnecessary rumours can create panic situation,” Das said.
In recent days, large scale frauds have been reported at the Punjab and Maharashtra Cooperative (PMC) Bank creating panic among its account holders.
In another case involving private lender Lakshmi Vilas Bank, the RBI has initiated Prompt Corrective Action (PCA) putting them under regulatory restrictions. The extreme step was taken due to high level of bad loans, lack of sufficient capital and poor asset quality.
The RBI Governor listed out various measures taken to address the issues involving the PMC and Lakshmi Vilas Banks. He stressed that swift actions had been taken in both the cases.
On apprehensions that many more co-operative banks could be involved in violation of banking regulations and hence depositors have reasons to worry, the RBI said that there was no need to believe such rumours.
“One incident can not be used and should not be used to generalise the health of the co-operative banking sector,” Das added.