Managing Director of Punjab and Maharashtra Co-operative Bank (PMC Bank) that was put under regulatory restrictions on Tuesday said that the Reserve Bank of India's (RBI) actions were too harsh. Joy Thomas also said that money of the depositors is safe with the bank.
In an interview to CNBC-TV18, Thomas said that the bank has ample assets to cover all liabilities of the depositors. He said that the apex bank imposed the restrictions because of divergences in NPAs but insisted that the action taken by the RBI was too harsh. "RBI could have restricted only the lending," he said.
Talking about the loans that were the reason behind the bank's downfall, Thomas said he cannot disclose the name of the companies as it is not a single group or company that can be blamed, and the investigation is going on and that more details can only be revealed after that.
He also said that the bank will come out of the situation very soon and repay its depositors.
In a statement on Tuesday, the RBI said that PMC Bank customers will not be able to withdraw more than Rs 1,000 from their accounts. The note said that this restriction has been imposed for six months.
"According to the Directions, depositors will be allowed to withdraw a sum not exceeding Rs 1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directions," the RBI stated.
Among a host of restrictions, PMC Bank will also not be able to grant or renew any loans and advances and make any investment.
Following the announcement, panic-stricken customers thronged the bank's branches and demanded an explanation.