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RBI imposes restrictions on PMC bank; depositors under panic

RBI imposes restrictions on PMC bank; depositors under panic

India Blooms News Service | @indiablooms | 24 Sep 2019, 12:32 pm

New Delhi: Tension is running high among the depositors of Punjab and Maharashtra Cooperative Bank(PMC Bank) after Reserve Bank of India restricted withdrawal of funds from their accounts, due to some irregularities committed by the bank. 

"According to the Directions, depositors will be allowed to withdraw a sum not exceeding ₹1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directions," the RBI stated on Monday.

Further the Bank will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrow of funds and accept fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations, unless RBI approves the same in writing.

The RBI has clarified that the bank’s licence is very much intact and it can continue to do business but with restrictions till further notice/instructions from the Central Bank.

The directions are subject to modification by Reserve Bank as per circumstances. The restrictions will remain in force for the next six months from Sep 23 after the close of business of the PMC bank, RBI informed.

PMC Bank is a scheduled cooperative bank with operations in Maharashtra, Karnataka, Delhi, Goa, Gujarat, Madhya Pradesh and Andhra Pradesh through its 137 branches.

The bank’s managing director Joy Thomas in a statement said: “As the MD of the Bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months.”

Despite the assurance, the depositors are under panic, as the bank is unable to come out with a date when the restrictions will be lifted.

Several branches were also gheraoed with depositors demanding clarity on the future of the deposits.

The bank had non-performing assets at 3.96% of its assets and Rs 331 crore as overdues.

The restrictions have been imposed in exercise of the powers vested in RBI under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the said Act.

PMC Bank, which is among the top 10 scheduled cooperative banks in the country, had total deposits of Rs11,617 crore and 8,383 crore in advances, respectively, as at 2019, March-end.

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