Money & Banking

RBI extends regulatory restrictions put on PMC Bank till June 22

Our Bureau Mumbai | Updated on March 21, 2020 Published on March 21, 2020

Under the directions, PMC Bank depositors cannot withdraw more than ₹ 50,000 of the total balance in their accounts

The Reserve Bank of India (RBI) on Saturday said it is trying to work out a scheme for revival of the scam hit Punjab and Maharashtra Cooperative (PMC) Bank even as it decided to extend the directions imposed on the bank for a further period of three months.

The directions on PMC Bank have been extended from March 23, 2020 to June 22, 2020, subject to review.

The RBI emphasised that unlike in the case of commercial banks, it has no powers to draw up an enforceable scheme of reconstruction of a cooperative bank.

“Nevertheless, in the interest of the depositors and the stability of the cooperative banking sector, the Reserve Bank of India, in consultation with various stakeholders and authorities, is trying to work out a scheme for revival of the bank. In order to take this forward, it is considered necessary to extend the aforesaid Directions for a further period of three months,” the RBI said in a statement.

In the wake of the Government notifying the “YES Bank Limited Reconstruction Scheme, 2020” on March 13, 2020 to rescue the private sector bank from an imminent collapse, PMC Bank depositors and shareholders too demanded that their Bank too should be revived/ rescued.

Under the directions, PMC Bank depositors cannot withdraw more than ₹ 50,000 of the total balance in their accounts. Due to enhancement of the withdrawal limit from time to time, the RBI said 78 per cent of the depositors of the bank were in a position to withdraw their entire account balance.

In October 2019, the apex bank, in a statement said the financial position of PMC Bank has been substantially impaired due to fraud perpetrated on it by certain persons. As soon as the matter came to its notice, RBI said action was taken in appointing an Administrator and ensuring that the bank’s available resources are protected and not misused or diverted.

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Published on March 21, 2020
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