RBI Increases Withdrawal Limit For PMC Bank Customers To Rs 25,000
Customers stand outside the Punjab and Maharashtra Cooperative Bank at GTB Nagar in Mumbai. (Source: PTI)

RBI Increases Withdrawal Limit For PMC Bank Customers To Rs 25,000

The Reserve Bank of India increased the withdrawal limit for customers of Punjab and Maharashtra Cooperative Bank Ltd., providing relief to depositors of the stressed lender.

Depositors are now allowed to withdraw Rs 25,000 from their accounts compared with the Rs 10,000 limit earlier in six months, RBI said in a press release. The decision was taken after reviewing the bank's liquidity position and with a “view to reducing the hardship of depositors”.

“With the above relaxation, more than 70 percent of the depositors of the bank will be able to withdraw their entire account balance,” the release said. “The Reserve Bank is monitoring the position of the bank and will continue to take necessary steps in the interest of depositors.”

Last week, the RBI imposed restrictions on PMC Bank capping the withdrawal limit to Rs 1,000 per account citing financial irregularities, failure of internal controls and wrong or underreporting of loan exposures. Two days later, it eased the limit to Rs 10,000 during the six months while other restrictions on the crisis-hit lender are expected to continue.

The bank’s outstanding deposits were at over Rs 11,000 crore as on March 31, according to its annual report.

The RBI superseded the bank’s board, invoking powers under the Banking Regulations Act. It has appointed an administrator to run the bank for now. Today, it also decided to appoint a three member committee to assist the administrator of PMC Bank.

Former managing director of PMC Bank K Joy Thomas, in a confession letter to the RBI, had recently detailed the relationship between the lender and the Wadhawan family to which it extended over 70 percent of its total loans.

On Thursday, the Economic Offences Wing of the Mumbai Police arrested realty firm Housing Development & Infrastructure Ltd. directors Rakesh and Sarang Wadhawan. The arrest came after an FIR alleged that the bank faked loan records to under-report the company as a non-performing asset.

The loan amounts of roughly Rs 2,000 crore, according to EOW, were diverted to the Wadhawans’ personal accounts. The police also suspect involvement of PMC Bank employees who may have allegedly tampered with the bank’s software to ensure that 44 accounts linked to the Wadhwans did not reflect in its system.

Also read: Confession Letter Of PMC Bank’s Former MD: The Story Of A Decades-Long Relationship Gone Wrong

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