In Drastic Move, RBI Restricts Withdrawals at PMC Bank to Rs 1,000 Per Account

The bank is not allowed to grant or renew any fresh loans.

New Delhi: The Reserve Bank of India (RBI) has placed curbs on the business of Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) for six months following detection of alleged irregularities.

PMC Bank had business of Rs 20,000 crore comprising deposits of Rs 11,617 crore and advances to the tune of Rs 8,383 crore at the end of March 2019.

RBI said depositors would 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.

Copy of the circular released by the Reserve Bank of India (RBI).

The bank could not grant or renew any loan, advances and make investments without prior approval of the RBI. The directions would remain in force for six months from the close of business of the bank on September 23, 2019, RBI said in a statement.

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A senior bank executive said RBI had in course of inspection found some gaps in treatment of loans. The bank was working to resolve the issue. He, however, declined to elaborate on the matter. Messages and calls made to PMC Bank Chief Executive Joy Thomas did not elicit any response.

The multi-state cooperative bank had 3.76 per cent gross non-performing assets (NPAs) and net 2.19 per cent NPAs as at the end of March 2019. It has 137 branches, including those in New Delhi.

This article first appeared on Business Standard and has been republished by special arrangement.