Finance Minister Nirmala Sitharaman on Thursday promised to bring in legislative changes for upholding of interests of PMC Bank customers. The depositors had gathered outside the office of the Bharatiya Janata Party ahead of Sitharaman's scheduled press interaction in the run-up to the October 21 Maharashtra Assembly elections.
Addressing a press conference, Sitharaman said secretaries from the department of financial services and economic affairs will be meeting a deputy governor of RBI soon to look into the "shortcomings" of the functioning of multi-state cooperative banks and see if any amendments can be made to the laws.
"They will discuss legislative steps needed to prevent such incidents from happening and empower the regulator better," Sitharaman said.
The BJP-led government will bring in a legislation to this effect in the winter session of Parliament, she said.
The minister said she will speak to RBI Governor Shaktikanta Das about the interest of the depositors and convey their urgency and distress.
She also told the irate depositors that the RBI is looking into the matter.
Last month, the PMC Bank was put under "directions" by the Reserve Bank of India (RBI) due to weak financial health, wherein the central bank has capped the deposit withdrawals at Rs 25,000.
PMC is in bad health allegedly due to its exposure to the near-bankrupt realty player HDIL, to which it has loaned over 70 per cent of its Rs 9,000 crore in advances.
On economic slowdown, Sitharaman said the government is giving sector-specific solutions to pump up the economy. She, however, parried a specific question on whether the government accepts if the country is in the midst of an economic slowdown.
India's GDP expansion has slowed to a six-year low of five per cent for the June quarter. This has led to a rash of downward revisions in expectations, including from the RBI which now expects GDP growth to come down to 6.1 per cent in FY20.
The government has taken a slew of measures, including a massive cut in corporate taxes to revive economic growth, even at the cost of sacrificing revenues.
Hinting at other measures like steps to improve exports, easing credit, making more money available by early repayments to vendors and front-loading of banks recapitalisation, Sitharaman said the government has been working on sector-specific measures.
"We are giving relief to all sectors who need help," Sitharaman said.
Her comments came hours after global rating agency Moody's Investors Service sharply cut its FY20 GDP growth forecast for India to 5.8 per cent.