RBI imposes restrictions on PMC Bank, sets Rs 1000 withdrawal limit
The Reserve Bank of India has imposed restrictions on Punjab and Maharashtra Co-operative (PMC) Bank for a period of six months. The restrictions have been issued on money withdrawals, issuance of loans and opening of fixed deposit accounts.
The RBI has set a withdrawal limit of Rs 1000, as a result of which, depositors will not be able to withdraw more than Rs 1000 from their savings, current or any other account in the PMC bank.
RBI Directions: Key Highlights
• The PMC bank cannot issue or renew loans and advances or open fixed deposit accounts for the next six months.
• The PMC bank has also been prohibited from making any type of investment and accepting fresh deposits without advance approval from the RBI.
• The bank has also been restricted from incurring any liability including borrowing of funds or disbursing or even agreeing to disburse any payment without prior written approval from RBI.
• The PMC bank account holders will not be able to withdraw more than Rs 1000 from any of their accounts.
Has PMC Bank shut down?
RBI clarified that the restrictions should not be viewed as cancellation of PMC’s banking licence by the central bank. The PMC Bank will continue to undertake banking business with the restrictions until further instructions.
The RBI may later consider modifications of these directions depending upon circumstances. For now, the restrictions will be in place for 6 months from the closure of the bank’s business on September 23, 2019. The RBI directed that a copy of the new directive should be forwarded to each depositor and will be displayed on the bank’s website.
Speaking on the issuance of restrictions by the central bank, PMC Bank’s MD Joy Thomas said that bank had been put under regulatory restrictions due to irregularities disclosed to the apex bank. Thomas said that as the MD of the Bank, he takes full responsibility and assured all the depositors that the irregularities will be rectified before the expiry of six months.
The PMC Bank, founded in Mumbai in 1984, is a multi-state urban co-operative bank.
The bank currently has 137 branches in six states across the country including Maharashtra, Goa, Karnataka, Gujarat, Madhya Pradesh, Andhra Pradesh and Delhi.
The bank ranks among the top 10 cooperative banks in the country.
The bank had deposits and advances averaging Rs 11,617 crore and Rs 8,383 crore respectively at the end of March 2019.