New India, old problems

RBI should initiate an asset quality review of all co-operative banks

- 

More than five years after the Punjab and Maharashtra Co-operative (PMC) Bank was declared insolvent and operations were suspended, the Reserve Bank of India (RBI) has superseded the board of New India Co-operative Bank for a period of 12 months. Despite the collapse of so many lenders in the past—both scheduled commercial banks and co-operative banks—no lessons appear to have been learnt. Once again depositors have been left in the lurch; they cannot withdraw their money for six months. The bank's business has come to a standstill because it can neither give loans nor accept deposits.