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RBI increases withdrawal limit for PMC depositors to Rs 25,000 from Rs 10,000
The Reserve Bank of India (RBI) has increased the withdrawal limit for PMC depositors to Rs 25,000 from Rs 10,000.
In a major relief to the depositors of Punjab and Maharashtra Cooperative Bank Limited, the Reserve Bank of India on Thursday evening raised the withdrawal limit to twenty five thousand rupees from ten thousand rupees after reviewing the bank’s liquidity position.
“The Reserve Bank of India again reviewed the bank’s liquidity position and, with a view to reducing the hardship of the depositors, has decided to further enhance the limit for withdrawal to ₹ 25000,” a RBI release said.
With the above relaxation, more than 70% of the depositors of the bank will be able to withdraw their entire account balance, said RBI. The Reserve Bank, however, added that it was monitoring the position of the bank and will continue to take necessary steps in the interest of depositors.
The Reserve Bank has also decided to appoint a Committee of three Members in terms of section 36AAA(5)(a) read with Section 56 of the Banking Regulation Act 1949, to assist the Administrator of Punjab and Maharashtra Cooperative Bank Ltd.
The Reserve Bank of India (RBI) had earlier on September 26 increased the withdrawal limit for PMC depositors to Rs 10,000 from Rs 1,000. That move had allowed 60% of the depositors to withdraw their entire balance, according to the RBI.
RBI’s first raise of withdrawal limit followed protests by bank depositors ahead of the festival and wedding season.
The curbs were necessitated on account of major financial irregularities, failure of internal control and systems of the bank and wrong or under-reporting of its exposures under various off-site surveillance reports.
Apart from limiting the amount that could be withdrawn, the RBI in its first order had also debarred the PMC bank for six months from granting, renewing any loans and advances, make any investments, incur any liability, including borrowal of funds or accept fresh deposits, etc, without the prior written approval from RBI.
The restrictions were imposed after it was revealed that the bank was involved in a big loan fraud involving hiding of real estate company, Housing Development Infrastructure Limited’s (HDIL) huge loan debts through dummy accounts and cooking of books.
PMC bank’s former Managing Director Joy Thomas had revealed that the bank’s exposer to HDIL stood at 10.2 billion rupees ($144 million) by 2011 and this was hidden from the RBI. HDIL has gone bankrupt.
