For thousands of depositors, morning hours darkened as they queued up at branches of Punjab and Maharashtra Co-operative Bank (PMCB) to withdraw their money after the Reserve Bank of India (RBI) directed the bank to suspend business for six months on account of bad quality loans.
At stake are deposits worth Rs 11,600 crore that the urban co-operative bank has mobilised since it came into existence from a small room in Mumbai in 1984. Ranked among the top 10 co-operative banks in the country, a substantial chunk of PMCB’s deposits comes from pensioners, senior citizens and small business entrepreneurs. On its website, the bank claims to have maintained the pension accounts of Maharashtra’s government employees.
“Give me poison so that I can kill myself,” wailed 75-year-old Kusum Devi, as she stood in front of the PMCB’s branch in Ballard Estate. Clad in a pink cotton saree, she caught hold of her daughter-in-law’s neck and threatened that she would kill the entire family in front of the branch if they didn’t return the Rs 3 lakh she had put there as fixed deposit.
PMCB’s mighty fall in stature has come as a brutal surprise. In its 2018-19 annual report, PMCB had stated its ambition was to turn into a commercial bank in 2020. Far from celebrating that vision, several entrepreneurs — who run small businesses and had parked their cash in the bank — are now worried about their future. Lured by the marketing line ‘Neighbourhood family bank’, a Punjabi businessman from Sion deposited Rs 90 lakh into a single account and now fears of his money is either “stuck” or worse, “lost”.
Manas (name changed to protect privacy), an interior designer, is worried that he may have to temporarily suspend his business as his Rs 50 lakh is locked with the bank’s fortunes. He was planning to utilise the advance payment from clients for starting off work on site.
Like Manas, other patrons of PMCB woke up to a jolting message on Tuesday morning. The bank’s Managing Director, Joy Thomas, said via WhatsApp that a regulatory restriction has been placed by RBI, which means PMCB’s 137 branches across Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh can’t lend or accept deposits for six months.
Closed For Business
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| Withdrawals capped at Rs 1,000 per account, no fresh loans |
- RBI put operational restrictions on Punjab & Maha Co-operative Bank to probe ‘bad-quality loans’
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- Established in 1984, PMCB ranked among the top 10 cooperative banks in the country
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- A substantial chunk of its deposits comes from pensioners, senior citizens and small biz owners
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- Bank claims to maintain pension accounts of Maharashtra’s government employees
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Assuring patrons that these irregularities will be rectified before the six months are over, Thomas said, “I know it is a difficult time for all of you and my apology may not restore the pain that you are undergoing. We assure that we will definitely overcome this situation and stand strong.” However, some fear that this may be the end of the road for the bank. Chandrakant Shah, aged 65, has Rs 36.5 lakh in the Ballard Estate branch, which he was to use to complete the purchase of his Mulund home.
“The last instalment of Rs 25 lakh was to go from this deposit, which had already matured,” he said, barely able to hold back the tears as he leans against the wall of a dilapidated building next to the branch. “I have been banking with them for 24 years and the branch employees are like family. Today, we have been betrayed. I will not be able to buy my house,” he said, his fingers running nervously through the three thick gold chains around his neck.
Kaumud wipes off her tears as she scolds her son for depositing Rs 10 lakh in the Dahisar East branch on September 8. “I work for a government enterprise and my son just started working,” she says. “We converted the surplus cash we had into a fixed deposit so that we could earn an interest of 9%.”
After selling off their property in Andheri, Mithun Roy and his mother put Rs 17 lakh in the Andheri West branch.
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 "Punjab and Maharashtra Co-operative Bank customers")
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