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RBI doubles withdrawal limit to Rs 1 lakh for PMC Bank depositors

In a relief to the depositors of the scam-hit PMC Bank, the RBI on Friday enhanced the withdrawal limit to Rs 1 lakh to mitigate their difficulties during COVID pandemic but extended the regulatory restrictions on the cooperative bank by another six months till December 22.

Siddhartha Singh

Siddhartha SinghBy Siddhartha Singh

Published on 20 Jun 2020 10:53 AM GMT

RBI doubles withdrawal limit to Rs 1 lakh for PMC Bank depositors
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RBI doubles withdrawal limit to Rs 1 lakh for PMC Bank depositors
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Mumbai: In a relief to the depositors of the scam-hit PMC Bank, the RBI on Friday enhanced the withdrawal limit to Rs 1 lakh to mitigate their difficulties during COVID pandemic but extended the regulatory restrictions on the cooperative bank by another six months till December 22.

The new withdrawl limit of Rs 1 lakh per depositor is inclusive of the earlier withdrawal limit of Rs 50,000 per depositor of the multi-state cooperative bank, according to an RBI release.

The RBI also enchanced withdrawal limits for depositors of four other cooperative banks under regulatory restrictions, including Sri Guru Raghavendra Sahakara Bank Niyamitha, Bengaluru, and Kolhapur-based Youth Development Cooperative Bank Limited, according to separate RBI releases.

The Reserve Bank had placed regulatory curbs on the Punjab and Maharashtra Cooperative Bank (PMC) Limited, Mumbai, on September 23, 2019, after finding out certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL.

With the latest enhancement of withdrawal limit, the RBI said more than 84 per cent of the depositors of the PMC Bank will be able to withdraw their entire account balance. As on 23 September, 2019 (date of imposition of RBI directions), total depositors of the bank were 9,15,775.

The withdrawal limit was last enhanced to Rs 50,000 per depositor on November 5, 2019. The restrictions were last extended upto June 22, 2020 in March.

The RBI said it has been engaging with the stakeholders to explore the possibility of a resolution of the bank.

However, the process has been affected due to the lockdown on account of COVID 19 and the continuing uncertainty around the pandemic.

Further, the extent of the negative net worth of the bank, and the legal processes involved in recovery of bad debts also pose challenges/limitations in resolution of the bank, it said.

Nevertheless, consultation with various stake-holders and authorities for resolution of the bank is continuing, the RBI said while extendeing the restrictions for a further period of six months to take the process forward.

The Reserve Bank also said it was closely monitoring the position and will continue to take further steps as are necessary to safeguard the interest of the depositors of the bank.

Regarding Sri Guru Raghavendra Sahakara Bank Niyamitha, the RBI said the withdrawal limit has been enhanced to Rs 1 lakh per depositor, inclusive of Rs 35,000 allowed earlier.

With the latest relaxation, more than 54 per cent of the depositors of the bank will be able to withdraw their entire account balance, it added.

In case of Kerala Mercantile Co-operative Bank Limited, Kozhikode, the withdrawal limit has been increased to Rs 50,000 (inclusive of Rs 2,000), RBI said, and added now more than 89 per cent of the depositors will be able to withdraw their entire account balance.

The withdrawal limit in case of Hindu Cooperative Bank Limited Pathankot, has been increased to Rs 50,000, inclusive of Rs 25,000 earlier. Now, more than 79 per cent of the depositors of the bank will be able to withdraw their entire account balance.

For the depositors of Kolhapur-based Youth Development Cooperative Bank Limited, the withdrawal limit increased to Rs 20,000 per depositor, inclusive of Rs 5,000 allowed earlier.

(PTI)

Siddhartha Singh

Siddhartha Singh

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