Business Other News 08 Nov 2019 Forensic audit of PM ...

Forensic audit of PMC Bank under way: RBI Governor Shaktikanta Das

FINANCIAL CHRONICLE
Published Nov 8, 2019, 1:15 am IST
Updated Nov 8, 2019, 1:15 am IST
Das said that the current status of the NBFCs was also discussed in the meeting and there are a large number of NBFCs that are functioning well.
Shaktikanta Das.
 Shaktikanta Das.

New Delhi: The Reserve Bank of India is closely monitoring the affairs at the Punjab & Maharashtra Cooperative Bank (PMC Bank) and a forensic audit of its accounts is under way, Governor Shaktikanta Das said on Thursday. He said an agency has been appointed to assess the realisable value of the bank’s assets spread across various states for monetisation.

Das, who was in the capital, to attend the Financial Stability and Development Council (FSDC) meeting chaired by the Finance Minister Nirmala Sitharaman, said the meeting reviewed all issues pertaining the country’s economy, including stress in the financial sector.

 

He said, the “PMC Bank situation is being very closely monitored by the Reserve Bank of India. We have had and we are having discussion with the various investigative agencies and... There are two things which are going on.

“Forensic audit, which has been ordered, that is under way. Second thing is the realisable value of the assets which were offered as a security to the PMC Bank are being assessed.”

These assets are spread over various parts of Maharashtra and some in other states, he said.

“So, an agency has been appointed and... the market value of these assets is being assessed and we have to also see whether the assets have been encumbered to somebody else…”

“The valuation process is going on, the forensic audit is going on, we have had discussions with the various investigation agencies about the other assets which they have identified. So, based on that, the Reserve Bank will take further decision with regard to the PMC Bank,” he said.

About the FSDC meeting, Das said, “We discuss mainly on overall macro-economic issues and the state of economy in details. Besides, the meeting also focussed on cyber-security issues that were one important component of the discussion. There were also some inter-regulatory issues, which were also discussed as well.”

The FSDC is the apex body of sectoral regulators, headed by the Finance Minister.

The 21st meeting of FSDC comes against the backdrop of the economy hitting a six-year-low growth rate of 5 per cent in the first quarter of 2019-20. Besides, unsatisfactory industrial output growth in August that contracted by 1.1 per cent and the output of eight core infrastructure industries which contracted by 5.2 per cent in September, created fears that the economy is slowing further.

Das said that the current status of the NBFCs was also discussed in the meeting and there are a large number of NBFCs that are functioning well.

“Even today, we have quite a good number of NBFCs, a large number of NBFCs which are well-functioning, which are able to access funds from the market which are able to access loans from the banks, and in fact, some of them have got overseas funding also,” he said.

The RBI is very closely monitoring the top 50 NBFCs which represent roughly 75 per cent of the asset size of the NBFC sector. “We are having regular interaction with the management of those NBFCs where we see any signs of vulnerability and whenever there is any vulnerable signs are visible, we are asking the management of the company to meet RBI and we asked them to take corrective steps through market mechanisms,” he added.

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Location: India, Delhi, New Delhi




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