Reserve Bank of India changes daily reporting system in cooperative banks after PMC Bank crisis

  • The RBI has asked chief executives of all cooperative banks to replace the existing system of email-based reporting at the branches to a web-based central system

  • The cooperative banks have been given a period of a month to notify the regulators of the extent of compliance

  • The RBI had put regulatory restrictions on PMC Bank after finding irregularities, and misreporting of loans given to real estate developer HDIL

After the over Rs 4,000 crore fraud at the Punjab and Maharashtra Cooperative Bank, the Reserve Bank of India on Friday decided to change the daily reporting system at cooperative banks.

In a circular addressed to chief executives of all cooperative banks, the RBI has asked them to replace the existing system of email-based reporting at the branches to a web-based central system. This will make use of RBI’s Central Information System for Banking Infrastructure (CISBI) which is an online portal that presently allots Basic Statistical Return (BSR) code to branches and offices of all banks, according to an IANS report.

These instructions are being issued in supersession of all the instructions issued on the subject so far, it said,

“Consistent with the needs of branch licensing and financial inclusion policies as well as the need for requisite coverage of additional dimensions/features, a new reporting system -- Central Information System for Banking Infrastructure, has been web-deployed to replace the legacy MOF system,” the central bank notification said.

These banks have been given a period of a month to notify the regulators of the extent of compliance.

Under the new system, all cooperative banks are required to submit their information in a single proforma online on the CISBI portal, as compared with the earlier system of submitting separate documents with information about daily business activity at the bank through e-mail, according to the RBI notification.

 Reserve Bank of India changes daily reporting system in cooperative banks after PMC Bank crisis

Representational image. Reuters.

"All cooperative banks should submit immediately and in any case not later than one week, the information relating to opening, closure, merger, shifting and conversion of bank branches/offices/Non Administratively Independent Offices (NAIOs)/Customer Service Points (CSPs) online through CISBI portal," the RBI said.

"After the initial submission of information on CISBI portal, a one-time confirmation stating that Correct and updated Bank-level information has been submitted on CISB'' shall be sent by banks to the concerned Regional Office of Department of Co-operative Bank Supervision within one month of issuance of this circular."

PMC Bank crisis

The RBI placed Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) under directions for six months from the close of business of the bank on 23 September, 2019.

The RBI had put regulatory restrictions on the bank after finding irregularities, and misreporting of loans given to real estate developer HDIL, with whom it has an exposure of a whopping 73 percent or Rs 6,500 crore of its total loan book of Rs 8,880 crore. The entire loan has been NPA for the past two-three years, a PTI report said.

The restriction included barring the bank from lending and accepting fresh deposits. It also superseded the board and the management of the bank and appointed an ex-RBI official as the administrator at the bank.

According to the RBI directions, depositors were allowed to withdraw a sum not exceeding Rs 1,000 of the total balance in every savings bank account or current account or any other deposit account.

On 26 September, the central hiked the withdrawal limit to Rs 10,000 per six months on all deposits held at the bank. This was subsequently increased to Rs 25,000 on 3 October after opposition from the depositors.

The central bank has already migrated all the past information of these lenders to CISBI, it said. They have also provided the nodal officers at these banks the login credentials using which they can access the new system.

-- With inputs from agencies

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Updated Date: Oct 12, 2019 12:49:33 IST