No need to panic, Indian banks are safe and stable, says RBI

The Reserve Bank of India has assured the public that the Indian banking system is in sound state and there is no need to panic. The clarification has come in the light of rumours around certain commercial and co-operative banks, causing panic among depositors.

"There are rumours in some locations about certain banks including cooperative banks, resulting in anxiety among the depositors. RBI would like to assure the general public that Indian banking system is safe and stable and there is no need to panic on the basis of such rumours," the central bank said.

Last week, the RBI had issued a statement refuting social media rumours that nine state-owned banks would be closed. Most of the banks named in these rumours were part of the latest round of bank consolidation announced by the Finance Ministry to merge 10 public sector banks into four global-sized lenders.

In its earlier statement, the RBI had said that the government was trying to strengthen the public sector banks and there was no question of closing down any one of them. The central bank also said that the government is working on reforms and capital infusion in PSU banks so that they can better serve their customers.

Depositors are worried after the RBI clampdown on Mumbai-based Punjab & Maharashtra Co-operative Bank (PMC Bank), affecting lakhs of customer. On September 23, the RBI had imposed regulatory restrictions on the PMC Bank for six months. The withdrawal limit for account holders was also kept at Rs 1,000 for six months, which was later raised to Rs 10,000.

PMC Bank was placed under an administrator by the RBI on September 24 and suspended its management led by managing director Joy Thomas. The regulator has also banned the cooperative from extending fresh loans or taking deposits, apart from capping withdrawals at Rs 10,000 per individual customer for the next six months.