MUMBAI : The Reserve Bank on Tuesday asked all urban cooperative banks (UCBs) with deposits of over ₹100 crore to constitute a Board of Management (BoM) comprising experts to oversee their functioning. The decision assumes significance against the backdrop of a scam at Punjab and Maharashtra Cooperative Bank leading to hardships to over 9 lakh depositors. "Since UCBs are accepting public deposits, it is imperative that a separate mechanism be put in place to protect the interests of depositors," the RBI said. Following the exposure of scam in the PMC Bank, which had over 9.15 lakh depositors, the RBI imposed restrictions on withdrawals. Statutory inspection of PMC by the RBI had revealed large group exposure of about ₹6,226.01 crore to Housing Development and Infrastructure Ltd (HDIL) Group companies.

Source: Mint December 31, 2019 13:52 UTC