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RBI clamps down on PMC Bank; customers can't withdraw more than Rs 1,000

RBI imposes restrictions on PMC Bank: The imposition will be in force for six months from September 23.

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RBI clamps down on PMC Bank; customers can't withdraw more than Rs 1,000
RBI imposes restrictions on PMC Bank

The Reserve Bank of India (RBI) has imposed restriction on how much depositors of Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC) can withdraw from their accounts. It added that PMC Bank customers will not be able to withdraw more than Rs 1,000 from their accounts.  

"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.

PMC Bank will not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated September 23, 2019, the statement mentioned.

The imposition on PMC Bank will be in force for six months from September 23.

The apex bank, however, stated that the order must not be construed as cancellation of banking licence by the Reserve Bank. "The bank will continue to undertake banking business with restrictions till further notice/instructions. The Reserve Bank may consider modifications of these directions depending upon circumstances," it added.

PMC Bank's Managing Director Joy Thomas said in a statement that the bank has been put under regulatory restrictions by the RBI because of irregularities disclosed to the apex bank. "As the MD of the Bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months," Thomas said.

Also read: SBI to link floating rate housing loans to RBI's repo rate

Also read: How much more can RBI cut repo rate? Another 100 basis points may be

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