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The Reserve Bank of India (RBI) on Friday doubled the limit for withdrawal for the depositors of the troubled Punjab & Maharashtra Co-operative Bank to ₹1 lakh per depositor.
This increase in limit is inclusive of the ₹50,000 withdrawal allowed earlier
“With the above relaxation, more than 84 per cent of the depositors of the bank will be able to withdraw their entire account balance,” according to the central bank’s statement.
Simultaneously, the validity of RBI’s Directions on the Bank has been extended for a further period of six months from June 23, 2020 to December 22, 2020 subject to review.
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, it added.
Further, the central bank observed that 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.
“Nevertheless, consultation with various stake-holders and authorities for resolution of the bank is continuing.
“It is, therefore, considered necessary to extend the aforesaid Directions for a further period of six months to take the process forward,” the RBI said.
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