By the Editor: Siddharth Sehgal

It has been few weeks now since PMC bank’s and its customers accounts were frozen by the RBI putting a withdrawal limit of 10000 INR in six months.  Just imagine the plight of the customer who has his life savings deposited in PMC and given the situation and the fraud that has come to light, it is unlikely that they would see their money anytime soon.

The problem is that our media has largely been silent on PMC fiasco because there is a fear among some of the rich and powerful that inconvenient dirt may come out. Most of the political parties have also tried to shift responsibility to RBI and downside in this whole episode is that the solution of the problems of customers stuck with PMC is not being sought.

As such there is no such thing as a fail safe bank and even public banks can get entangled in fraud as we saw in the case of PNB but Cooperative banks are far more vulnerable entities, they essentially try to lure people with lucrative interest rates and in order to fulfill these high interest obligations they seek out risky businesses for investments. In PMC’s case they put all their eggs in HDIL’s basket despite knowing that the money they are putting in will not come out, in fact PMC’s leadership hid these bad, fraudulent loans from their core balance sheets and CBS system. PMC leadership is equally responsible in this fraud but this this essentially the systemic problem of our banking system, the bosses don’t do the due diligence and the customers end up paying the bill. So if anything you should learn from this Indian banking disaster is that do not put your money in cooperative banks.

Another sad fact about our banking system is that we know there is a fire when the room is on fire, RBI the finance ministry, Enforcement Directorate or any other regulatory agencies only react to a crisis, they will wait till something goes bad and usually the cases of these banks gone rouge drags out in lengthy investigations and court cases. This drag wears down the aggrieved customers; it breaks their moral and puts their financial and general well being at risk. We are already in a recession and not having good, qualified people at the posts where they are needed will only add to our economic woes.

We have consumer rights only in the name, the lack of accountability and an oversupply of incompetent red tape makes us a most vulnerable population, trust me businesses get away with all kind of shady practices because they can and we as Indians have to change this system which in a way is rigged against us. We need our very own Elizabeth Warren who can go after these big businesses but right now there aren’t many people out there who would speak for rights of the customers.