New Delhi: Customers of the Punjab and Maharashtra Cooperative Bank (PMC) will now be able to withdraw up to Rs 10,000 from the total balance held in their savings, current or any other deposit account with the lender.
A late Thursday afternoon notification from the Reserve Bank of India (RBI) announced the same, noting that the relaxation has been granted “with a view to reducing the hardship of the depositors”.
With the new rules, the RBI has noted, more than 60% of the PMC Bank’s depositors will be able to withdraw their entire account balance.
The banking regulator had two days ago placed the PMC Bank under severe restrictions over various financial irregularities, saying cash withdrawals of only Rs 1,000 could be made. The move caused widespread panic amongst the lender’s customers, leading to protests by angry depositors across the bank’s branches in Mumbai.
Breaking its silence on Thursday, the RBI noted that the strictures it placed on PMC Bank were justified due to “major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various off-site surveillance reports”.
Over the last 48 hours, media reports have identified at least two accounts that have come under the scanner. One of them is loans granted to real estate group Housing Development Infrastructure (HDIL), which has links to bank chairman Waryam Singh.
Nevertheless, the RBI may now believe the PMC Bank’s liquidity profile is good enough for up to 60% of depositors to move to another lender.
“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. Accordingly, vide modified Directive dated September 26, 2019, it has been decided to allow the depositors to withdraw a sum not exceeding ₹10,000/- (Rupees Ten Thousand Only) (including ₹1,000/- wherever already withdrawn) of the total balance held in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directive dated September 23, 2019.” its statement noted.
“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.