Restriction Ease On PMC Bank Fails To Stem Customer Panic

In a scant relief to the customers of the crisis-hit Punjab & Maharashtra Cooperative (PMC) Bank, the Reserve Bank of India (RBI) has increased the withdrawal limit from Rs 1,000 to Rs 10,000. 

RBI: On a preliminary assessment of Punjab and Maharashtra Cooperative Bank Ltd (Mumbai), RBI has decided to allow the depositors to withdraw a sum not exceeding ₹10,000 of the total balance held in every savings bank account or current account or any other deposit account pic.twitter.com/rnerT13UK5

— ANI (@ANI) September 26, 2019

"Other terms and conditions of the said Directive shall remain unchanged. With the above relaxation, more than 60% of the depositors of the Bank will be able to withdraw their entire account balance," RBI said in a statement.

"The above relaxation has been granted with a view to reducing the hardship of the depositors. The Reserve Bank is closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank," RBI said.

This is heartbreaking. #PMC_BANK crisis#BJPSeBanksBachao

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— Ruchira Chaturvedi (@RuchiraC) September 25, 2019

Earlier on Tuesday, RBI had barred the PMC Bank from carrying out almost all its routine banking activities for six months. It allowed depositors to withdraw only Rs 1000 even from their multiple accounts. The sudden decision caused panic among depositors.

The move came after the RBI had found certain irregularities in the bank, including under-reporting of NPAs and had put a restriction on the bank for further lending.

The RBI also sacked the bank's board of directors under sub-sections 1 and 2 of section 36 AAA read with section 56 of the Banking Regulation Act 1949. An administrator has been appointed to take charge.

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