The Reserve Bank of India on Friday has overhauled the daily reporting system at cooperative banks after the collapse of Punjab and Maharashtra Bank following the uncovering of Rs.4000 crore fraud at the Mumbai based cooperative bank.In a circular addressed to the chief executives of all cooperative banks, the Reserve Bank has asked all such lenders to replace the existing system of email-based reporting at the branches to a web-based central system. Under the new system, all co-operative banks are required to submit their information in a single proforma online on CISBI portal, as compared with the earlier system of submitting separate documents with information about daily business activity at the bank through e-mail, according to the RBI notification.On September 26th, the Reserve Bank had placed PMC under section 35A which froze all deposits held at the bank to a withdrawal limit of Rs.10000 for a period of six months. In the weeks subsequent, a charge sheet was filed against the top management of the bank and the promoters of HDIL, the shadow bank to which the bank had allegedly diverted Rs.4355 crore of funds. After a mass outcry by the depositors following the implosion of the fraud, the Reserve Bank subsequently increased the withdrawal limits to Rs.25000.The police have so far arrested HDIL promoters Sarang and Rakesh Wadhawan, the bank’s former chairman Waryam Singh and former managing director Joy Thomas in connection with the case. They have also issued 17 look-out circulars, a dozen of which are against the erstwhile directors of the bank.The central bank has already migrated all the past information of these lenders to CISBI, it said.

Source: Economic Times October 11, 2019 16:07 UTC