Money & Banking

Depositors of PMC Bank still await clarity on withdrawals

Surabhi Mumbai | Updated on August 20, 2021

High-value depositors account for about 85 per cent of the deposits.

Nearly two years since it was placed under directions by the Reserve Bank of India, depositors of Punjab and Maharashtra Cooperative Bank (PMC Bank) continue to face uncertainties over when they will access their savings.

Depositors are waiting for more clarity on when they would withdraw more funds after the DICGC Bill’s passage and want to know how they will be repaid amidst plans for the formation of a small finance bank.

About 1 lakh depositors of PMC Bank are expected to benefit from the amendments to the Deposit Insurance and Credit Guarantee Corporation Act under which account holders will get up to ₹5 lakh within 90 days of the RBI imposing a moratorium on the bank.

Plight of high-value depositors

However, it is estimated that about 43,000 high-value depositors will still be unable to withdraw their full savings, with many of them being senior citizens.

These high-value depositors account for about 85 per cent of the deposits in the bank.

“We believe that the amendment has been passed, but there is not any information on when we can withdraw funds. So, there is no real benefit to account holders at present,” said Revadhar Tiwari, an account holder with PMC Bank.

Many are planning to visit their bank branches to understand when they can withdraw more funds.

According to sources, the issue is also being discussed on Whatsapp groups of PMC Bank depositors, and many have also been raising the question on social media like Twitter.

The issue of full repayment of savings is the main concern.

“Depositors are eager and awaiting the modality of the payments as how the RBI will give them their hard-earned money. We want a clear formula on how the depositors above ₹5 lakh would be paid. We expect that the savings of all the depositors along with the accrued interest will be returned and urge the RBI Governor to announce that each and every retail depositor's money would be protected,” said Chander Purswani, President, PMC Depositors Forum.

RBI had, on June 18, 2021, granted “in-principle” approval, valid for 120 days, to Centrum Financial Services Ltd to set up a small finance bank. Once the SFB is floated, PMC Bank would be merged into it.

The bank has been under All Inclusive Directions of the RBI from the close of its business on September 23, 2019, which has been extended till December 31, 2021. At present, the deposit withdrawal limit for PMC Bank has been capped at ₹1 lakh.

Published on August 19, 2021

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