RBI Doubles Withdrawal Limit To Rs 1 Lakh For PMC Bank Depositors
More than 84% of the depositors of the bank will be able to withdraw their entire account balance: RBI.
In a relief to the depositors of fraud-hit PMC Bank, the Reserve Bank of India on Friday enhanced the withdrawal limit to Rs 1 lakh while extending the regulatory restriction on the cooperative bank by another six months till Dec. 22.
The earlier withdrawal limit was Rs 50,000 per depositor.
The RBI had placed regulatory curbs on the Punjab and Maharashtra Cooperative Bank Limited, Mumbai, on Sept. 23, 2019, after finding out certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL.
With the latest relaxation on withdrawal, more than 84% of the depositors of the bank will be able to withdraw their entire account balance, the RBI said.
The withdrawal limit was last enhanced to Rs 50,000 per depositor on Nov. 5, 2019, and the restrictions extended up to June 22, 2020.
"Further, on a review of the bank's liquidity position, its ability to pay the depositors and with a view to mitigating the difficulties of the depositors during the prevailing Covid-19 situation, it has also been decided to further enhance the limit for withdrawal to Rs 1,00,000 per depositor, inclusive of Rs 50,000 allowed earlier," the RBI said in a statement.
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.
Earlier, the central bank had superseded the board of PMC Bank and had appointed JB Bhoria, an ex-RBI official, as its administrator.
The RBI had placed restrictions on the bank that included barring the bank from giving fresh loans and acceptance of fresh deposits. Depositors were also not allowed to withdraw more than Rs 1,000 initially from their accounts but the limit was increased gradually later.