Money & Banking

PMC Bank receives 1,229 applications for deposit withdrawal

Our Bureau Mumbai | Updated on June 06, 2021

The withdrawals are meant for treatment of Covid-19

The administrator of the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank received 1,229 applications for withdrawal of deposits specifically for treatment of Covid-19 illness.

These applications were received since April 16, 2020, when the Reserve Bank of India (RBI) allowed withdrawals up to Rs 5 lakh for treatment of critical illness under medical hardship ground, including Covid-19.

As per the affidavit filed by the Administrator in the Delhi High Court in the matter relating to Bejon Kumar Misra versus Union of India and others, of the aforementioned applications, 419 were received from March 15, 2021 till May 24, 2021.

 

PMC Bank’s Administrator AK Dixit stated that all the applications have been duly processed and approved by him as per RBI’s directions.

The administrator submitted that extension of present directions (issued by RBI with effect from the close of the bank’s business on September 23, 2019) has been done for financial reasons, owning to prevailing conditions and to preserve scarce resources of the bank till the time its resolution is achieved.

As per the affidavit, the financial condition of PMC Bank continues to be precarious, with its liquidity position not improving enough to allow much room for enhancement of withdrawal limit.

Further, the bank also needs to maintain bare minimum liquidity to run as a going concern and to make itself viable for prospective investors for any takeover/ merger. The resolution efforts also are at advanced stages, the affidavit said.

By virtue of the enhanced withdrawal limit of Rs 1 lakh (upped from Rs 50,000 on June 19, 2020), more than 84 per cent of the depositors of the Bank will be able to withdraw their entire account balance, according to the administrator.

However, depositors have been allowed to withdraw up to Rs 5 lakh on hardship grounds for treatment of terminal illnesses, including treatment of Covid-19 .

The Centrum Capital and BharatPe combine are believed to be the front runners to takeover PMC Bank.

The Bank has been under RBI directions for over 20 months now and depositors, especially senior citizens, have been finding it difficult to make ends meet. Deposit withdrawal has been capped at Rs 1 lakh per depositor during the entire period the bank is under directions.

Published on June 06, 2021

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