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In further relief to customers, RBI revises PMC Bank withdrawal limit to Rs 25,000

The RBI had on September 23 placed restrictions over account holders of PMC Bank after allegations of financial irregularities.

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Punjab and Maharashtra Cooperative Bank (PMC Bank),
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Further bringing relief to depositors, the Reserve Bank of India (RBI) on Thursday revised the withdrawal limit for customers of Punjab and Maharashtra Cooperative Bank (PMC Bank), saying that account holders can now withdraw Rs 25,000 over the next six months.

The RBI had on September 23 placed restrictions over account holders of PMC Bank after allegations of financial irregularities. The limit was revised to Rs 10,000 three days later. 

The RBI "reviewed the bank’s liquidity position and, with a view to reducing the hardship of the depositors, has decided to further enhance the limit for withdrawal to Rs 25,000," it said in a statement. 

It said that more than 70% of the depositors of the bank will now be able to withdraw their entire account balance. 

"The Reserve Bank is monitoring the position of the bank and will continue to take necessary steps in the interest of depositors," it said. 

"The Reserve Bank has also decided to appoint a Committee of three Members in terms of section 36AAA(5)(a) read with Section 56 of the Banking Regulation Act 1949, to assist the Administrator of Punjab and Maharashtra Cooperative Bank Ltd," it added. 

This comes on the day when Mumbai Police made its first arrest in connection with the loan fraud in the PMC Bank case.

Sarang Wadhawan and Rakesh Wadhwan, both directors of Housing Development Infrastructure Limited (HDIL), are accused of loan default in connection with the PMC Bank case.

On September 30, EOW of Mumbai Police had registered an FIR against senior officials of HDIL and PMC Bank in connection with a fraud of over Rs 4,355 crores.

The loan default case came to light after the RBI imposed restrictions on withdrawals from the bank on September 23. In directions issued to the bank, the RBI said that depositors will be allowed to withdraw a sum not exceeding Rs 1,000 of the total balance in every bank account.

The RBI also restricted the bank to not grant or renew any loans and advances, make any investment or incur any liability, including borrower of funds and acceptance of fresh deposits for six months.

The bank will also 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" without prior approval in writing from the RBI, the central bank said. 

After outrage from angry customers, RBI increased the withdrawal limit from Rs 1,000 to 10,000 on September 26 but other restrictions remained in place. 

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