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" MUMBAI: Other than individual small depositors, a number of housing societies whose funds are held up in PMC Bank are facing a crisis of payments. Managing committees are distressed to find crores blocked in collapsing cooperative banks.The Model Bye-Laws stipulate that housing societies must open a bank account in the nearest state or district central cooperative bank. The rule has forced societies to park lakhs or crores in failing institutions. Besides societies, several cooperative credit societies had also parked deposits with PMC.Over the past few years, urban cooperative banks have found themselves in trouble. These include Rupee Bank, CKP Bank, and now Maharashtra State Cooperative (MSC) Bank, PMC, Karnala and City cooperative banks. Their number reportedly fell from 1,926 in March 2004 to 1,551 in March 2018. Most cooperative banks are helmed by politicians, and some fail ahead of elections. A well-known housing society in Kharghar has deposits worth Rs 1 crore in Karnala Cooperative Bank, which is allegedly “refusing to honour its commitment”. A resident said, “All top (bank) officials are reportedly on medical leave. Access to funds is barred.” The managing committee is discussing whether to move the registrar of housing societies and open an account elsewhere to tide over its payment crisis.Another housing society in Bandra with deposits stuck in PMC Bank has urged members to pay maintenance bills in cash until it opens a new account elsewhere. A member said, “Once it does that, it will accept cheques.”Read alsoRs 2,500 crore exposure to HDIL pulled PMC Bank down Sanjay Kudwalkar, a mid-level advisor at Maharashtra Societies Welfare Association, said Rule 113 of the Model Bye-Laws (2014) mandates that all housing societies have an account in a cooperative bank. “But individual societies can pass a resolution in their AGM and seek permission from the registrar to open an account in a nationalised or a private bank. They must cite their reasons for doing so, like if the cooperative bank is far away or inconvenient. They are then allowed to do so.”An officer at the office of the joint registrar of housing societies in Fort said, “How many NPAs can the (banking) system tolerate? Since the past four or five years, there has been a surge in the number of cooperative banks whose financial health has deteriorated. Since the PMC Bank crisis unfolded on Tuesday, we are receiving alerts that more banks could go down that path.”Follow and connect with us on Twitter, Facebook, Linkedin, Youtube"
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