PMC Bank crisis: RBI raises withdrawal limit for customers to Rs 10,000

The Reserve Bank of India (RBI) has increased the withdrawal limit for customers of Punjab and Maharashtra Cooperative Bank (PMC Bank) to Rs 10,000 from Rs 1,000 earlier, the banking regulator said in a statement. The revised limit will include the Rs 1,000 that customers may have already withdrawn.

RBI has also asked PMC Bank to keep the amount required to pay the depositors separately in an escrow account and/or in earmarked securities which will be utilized by the bank only to pay to the depositors.

The bank shall not allow withdrawal of any part of share capital or Tier-2 capital or any funds until all depositors are fully paid, RBI said.

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“On a preliminary assessment of the bank’s latest depositor and liquidity profile as furnished by the Administrator, RBI has decided, in the interest of depositors, to review the Directions,” the regulator said in a statement on September 26.

“Other terms and conditions of the said Directive shall remain unchanged. With the above relaxation, more than 60 percent of the depositors of the Bank will be able to withdraw their entire account balance,” the RBI added.

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RBI said that the 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,” it added.

Customers were shocked on September 24, when a message from the bank revealed that it has been put under directions by RBI for six months. This meant that the bank's operations are practically taken over by the regulator, with PMC's management superseded and the board dissolved.

The bank has called off its upcoming annual general meeting that was scheduled to be held on September 28.

Earlier today, customers held protests in Mumbai and lodged a complaint against the bank’s directors and chairman for misappropriation of funds.

As of March 2019, PMC Bank held deposits of Rs 11,617.34 crore. It has 137 branches, mostly located in Mumbai.