Reuters shines a light on the rot in India’s co-operative banks

Reuters shone a light on the deep problems in India’s tens of thousands of co-operative banks, which hold about 11% of banking sector assets. Over 900,000 depositors of Punjab & Maharashtra Co-operative (PMC) Bank have been blocked from withdrawing more than 100,000 rupees from their accounts as the Reserve Bank of India investigates allegations of fraud and concealing bad loans. Co-operative banks, many of which are tiny, are subject to less stringent regulation than commercial banks and more than two dozen of them are currently facing lending or withdrawal restrictions by the RBI because of financial irregularities.