News Nation Logo

Centre To Increase Bank Deposit Guarantee Insurance From Rs 1 Lakh: Nirmala Sitharaman

In View Of The Recent PMC Bank Scam, Sitharaman Said That The Centre Was Also Planning To Bring Another Legislation To Regulate Multi-state Co-operative Banks.

News Nation Bureau | Edited By : Shashikant Sharma | Updated on: 15 Nov 2019, 07:41:55 PM
PMC bank depositors protesting against the Reserve Bank order to limit withdrawals of their money.

New Delhi:

Finance Minister Nirmala Sitharaman on Friday said that her government will hike bank deposit guarantee insurance from Rs 1 lakh and a legislation on this is likely to be tabled in Parliament during the winter session starting from November 18. In view of the recent PMC bank scam, Sitharaman said that the Centre was also planning to bring another legislation to regulate multi-state co-operative banks.

To address the grievances of PMC Bank depositors, Sitharaman said that her government has had a discussion with the Reserve Bank and other agencies on using the confiscated properties of (PMC bank) promoters to pay back to customers.

"We have had a discussion with RBI and other agencies on if any of the confiscated properties of the promoters (PMC Bank) can be brought under RBI and pay back to the customers of Punjab and Maharashtra Co-operative (PMC) Bank,” she said.

The remarks of the finance minister has come in wake of recent deaths of PMC bank depositors due to mutliple reasons after they were stopped from withdrawing their hard-earned money deposited in the state-run lender.

Promoters of real estate group HDIL, Rakesh and Sarang Wadhawan, who are the prime accused in the PMC Bank scam, have requested the RBI and investigation agencies to sell off their assets, including a yacht, a Rolls Royce and an aircraft, to pay off the bank's dues.

Also Read | To Pay Off Dues, PMC Scam Accused Offer RBI To Sell Their Rolls Royce, Yacht, Falcon Aircraft

The Wadhawans, who were remanded in judicial custody by a court in Mumbai on Wednesday, in a letter to the Enforcement Directorate, the Union finance ministry and the RBI, requested that they be allowed to sell off 18 of their attached assets. The letter was released by a spokesperson of the Wadhawans. According to the Mumbai Police's Economic Offences Wing, which first arrested the Wadhawans, the scam at the Punjab & Maharashtra Cooperative Bank is worth Rs 4,355 crore.

"We state that while denying the allegations raised in FIR no. 86/ 2019...solely with the purpose to work towards the resolution of the matter in the interest of depositors which was also communicated vide our earlier letters dated September 30, 2019, October 1, 2019 and October 3, 2019 sent to (ministry of Finance, Reserve bank of India), we request you to immediately take steps to sell the assets mentioned below... and adjust it towards the principal of the loans taken by the respective companies which own the assets...," the letter signed by the arrested father and son duo read.

The assets listed in the letter include ultra-luxury cars such as a Rolls Royce Phantom, Bentley Continental, a BMW 730 LD, as well as a humble Ambassador, owned by Rakesh Wadhawan. It also lists assets owned by Sarang, Rakesh's son, including a Falcon 2000 Aircraft, Audi AG, a FerrttiYacht 881, two electric cars, three Quad Bikes (ATV) and speed boat (Dolphin super deluxe 31HT, 7 seater).

"It is in the larger public interest that the assets are disposed of so as to mitigate the present situation," said the letter. According to the EOW, the management of the PMC Bank, in cahoots with the Wadhawans, concealed from the banking regulators' scrutiny huge loan defaults by HDIL group firms. Over 70 per cent of the bank's advances went to HDIL group, which led to a huge crisis when the group defaulted on repayment.

For all the Latest Business News, Download News Nation Android and iOS Mobile Apps.

First Published : 15 Nov 2019, 07:41:55 PM