PMC Bank: RBI increases deposit withdrawal limit to Rs 50,000, reopens ATMs

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The Reserve Bank of India (RBI) has increased deposit withdrawal limit for Punjab and Maharashtra Cooperative (PMC) Bank customers to Rs 50,000 from November 5.

This includes the limit of Rs 40,000 that was relaxed earlier. The move will allow 78 percent of the bank's depositors to withdraw their entire account balance.

RBI has also decided to allow depositors to withdraw cash from the bank's own ATMs within the relaxed limit of Rs 50,000.

The troubled cooperative bank was taken off the payments network resulting in shutting down of its ATMs for two months. This left customers queuing up at the bank's branches to access their accounts. However, the online banking service still remains inaccessible.

On September 23, the RBI had placed PMC Bank under directions for six months over alleged financial irregularities. As a result, restrictions were placed on the bank's basic operations like lending and deposit withdrawals.

The RBI has increased the deposit withdrawal limit four times from the initial limit of Rs 1000 per customer.

"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," the regulator said.

On November 4, the Bombay High Court asked RBI on what steps the regulator had taken to ease the pain of depositors. It directed the RBI to file its affidavit and posted the matter for further hearing on November 19. The court refused to grant any interim relief in the matter.