Finance Minister Nirmala Sitharaman on Friday said the government will amend the legislation to raise the insurance cover for bank deposits from the existing level of Rs 1 lakh to improve the Reserve Bank of India’s oversight on multi-cooperative banks, PTI reported.

The government will table these amendments in the upcoming winter session of Parliament that starts on November 18, the minister told reporters in Delhi.

Questions have been raised about the lack of regulatory supervision after grave financial irregularities at the Punjab and Maharashtra Cooperative Bank left thousands of depositors in distress. The scam is said to be worth Rs 4,355 crore.

Sitharaman said the move is to ensure that banking function of the cooperatives is brought under the Banking Regulation Act so that there is compliance with the prescribed prudential norms, The Times of India reported. At present, the multi-state cooperative banks operate under the regulatory preview of both the central bank as well as state cooperative societies.

Sitharaman, however, did not specify the extent to which the cover will be increased. She said the quantum of the increase will be higher as the current cover was decided years ago.

The finance minister also said that the government is in talks with the Reserve Bank of India to see if the assets of the PMC Bank could be sold to recover the depositors money.

On telecom sector crisis

Sitharaman spoke about the crisis in the telecom sector after two important players in the industry Bharti Airtel and Vodafone Idea reported historic losses in the second quarter of this fiscal on Thursday.

“I want no company to shut operations,” the minister said. “I want everyone to be up and running. We want the economy to have good number of companies in business and flourish in their business.”

She said the government intends to address the concerns in the telecom sector that has been affected by additional dues on account of last month’s Supreme Court ruling on adjusted gross revenue.

“Not just telecom sector, my wish is all companies in all sector[s] should be able to do business, service their market customer and survive,” Sitharaman added. “So with that approach, the finance ministry has always been talking and in telecom too that’s the approach we have taken.”

Vodafone Idea had declared a loss of Rs 50,922 crore while Bharti Airtel reported a loss of Rs 23, 045 crore. The two companies have warned that if the government does not offer them relief on the demand to pay arrears of revenue share along with interest and penalty, adding up to about Rs 80,000 crore between them, their very existence will be in doubt.

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