Getty ImagesTo ease the problems faced by the deposit holders of Punjab and Maharashtra Co-operative (PMC) Bank, the Reserve Bank of India has decided to ease withdrawal restrictions. As per the statement released by the central bank, the withdrawal limit has been relaxed by allowing customers to withdraw up to Rs 10,000 of the total balance held in every savings bank account or current account or any other deposit account. Earlier, the RBI has put the restrictions on withdrawal of Rs 1,000 for six months.
The RBI in its statement further said, "With the above relaxation, more than 60% of the depositors of the Bank will be able to withdraw their entire account balance. 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 had put restrictions on the bank for six months citing several regulatory lapses, primarily massive under-reporting of non-performing assets. According to a story in Mumbai Mirror, the biggest reason for this was a loan of Rs 2,500 crore to the now bankrupt real estate firm Housing Development and Infrastructure Ltd or HDIL.
The story says that PMC Bank's auditors did not classify the loan to HDIL as an NPA despite HDIL defaulting on repayments. RBI finally had to put its foot down and termed the loan as a "complete loss". The major restrictions on PMC Bank imposed by the apex bank included capping withdrawals at Rs 1,000 per customer (which has now been upped to Rs 10,000) during the six-month period and banning the bank from extending new loans.
Further, allaying fears of depositors and customers, PMC, which is under RBI management now, said it has enough liquidity to meet all liabilities and every penny of the public is secure.
Several account holders of the Bank filed a joint police complaint against the bank's chairman and its directors for alleged misappropriation of funds of the customers.
The RBI in its statement further said, "With the above relaxation, more than 60% of the depositors of the Bank will be able to withdraw their entire account balance. 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 had put restrictions on the bank for six months citing several regulatory lapses, primarily massive under-reporting of non-performing assets. According to a story in Mumbai Mirror, the biggest reason for this was a loan of Rs 2,500 crore to the now bankrupt real estate firm Housing Development and Infrastructure Ltd or HDIL.
The story says that PMC Bank's auditors did not classify the loan to HDIL as an NPA despite HDIL defaulting on repayments. RBI finally had to put its foot down and termed the loan as a "complete loss". The major restrictions on PMC Bank imposed by the apex bank included capping withdrawals at Rs 1,000 per customer (which has now been upped to Rs 10,000) during the six-month period and banning the bank from extending new loans.
Further, allaying fears of depositors and customers, PMC, which is under RBI management now, said it has enough liquidity to meet all liabilities and every penny of the public is secure.
Several account holders of the Bank filed a joint police complaint against the bank's chairman and its directors for alleged misappropriation of funds of the customers.
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