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Angry and dejected customers, both young and old, protested across various branches of Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC) after the Reserve Bank of India on Tuesday imposed restrictions on the lender for six months following alleged ‘irregularities’.
Most depositors whom BusinessLine spoke to were anxious about the fate of their savings. They had parked their lifetime savings in the bank as it offered higher fixed deposit rates than mainstream banks, and its customer service was good.
What the RBI said
The city-based bank, headquartered in a building ironically called ‘Dreams Mall’, has around ₹11,600 crore of public deposits. According to the RBI’s directions, which will be in force for six months, without a prior written approval, PMC Bank cannot grant or renew any loans and advances, make any investment, and incur any liability, including borrowing funds and accepting fresh deposits. The RBI has capped withdrawals at ₹1,000 per customer for the six-month period. The regulator, however, said the issue of the directions should not be construed as a cancellation of the banking licence.
According to regulatory sources, the bank’s board has been superseded. A retired senior RBI official has been appointed as an administrator, they added.
Fury and fear
At some locations, police personnel had to be deployed to control angry customers who had either queued up at the bank’s onsite ATMs to withdraw money or demanded to know the fate of their deposits. Cops waved the RBI circular at the customers, but they were in no mood to listen or disperse.
The public, especially senior citizens, are subjected to misery when a bank gets into trouble and the RBI imposes restrictions on withdrawals. Septuagenarian SG Varde was at the Bhandup branch with his wife, worried about the fixed deposits they had placed with the bank. The interest on the deposits was a key source of income for his family.
Some customers were worried about the fate of the electronic clearing service (ECS) mandates and post-dated cheques they had issued towards monthly instalments for home, auto and vehicle loans.
Customers outside PMC’s Wagle Estate branch (Thane) feared they may be classified as loan defaulters, with lenders taking recovery action due to the non-execution of the ECS mandate or bouncing of post-dated PMC Bank cheques.
Palvinder Singh Nanda, a transport operator, said that as his current account in PMC Bank cannot be operated he will have to open a new account with another bank.
An agitated Rajkumar Jaiswal said his family holds about ₹22 lakh across four FDs with the bank. The management and RBI officials should have reached out to assuage customers’ concerns, he said.
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