Mumbai, Sep. 26 (IANS): In a measure of relief to account holders of the Punjab and Maharashtra Cooperative (PMC) Bank, the Reserve Bank of India (RBI) on Thursday enhanced the withdrawal limit for customers to INR 10,000.
The central bank had received a lot of flak after it had placed a withdrawal limit of INR 1,000 per account on Tuesday.
"On a preliminary assessment of the bank's latest depositor and liquidity profile as furnished by the administrator, RBI has decided, in the interest of depositors, to review the directions," the RBI said in a statement.
"Other terms and conditions of the said directive shall remain unchanged. With the above relaxation, more than 60 per cent of the depositors of the bank will be able to withdraw their entire account balance."
According to the RBI, it would review the multi-state urban cooperative bank's position and will continue to take further steps as are necessary to safeguard the interest of the depositors of the bank.
On Tuesday, the bank was barred from carrying out the majority of its routine business transactions for a period of six months on account of major financial irregularities that came to the Reserve Bank's notice recently.
The PMC Bank has been barred from granting or renewing loans and advances, making any investments, incurring any liability, including borrowal of funds or accepting fresh deposits, among others, without the prior written approval from RBI.
Described as a multi-state cooperative banking entity, the PMC Bank has branches in Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh.
Founded in 1984 in a small room in Mumbai, it has now grown to a network of 137 branches in six states and ranks among the top 10 cooperative banks in the country.
Make RBI accountable for PMC Bank problems: Unions urge FM
Two major unions in the banking sector has urged Finance Minister Nirmala Sitharaman to make Reserve Bank of India (RBI) accountable for the problems in Punjab & Maharashtra Co.Op. Bank.
The two unions are - All India Bank Employees' Association (AIBEA) and All India Co.Op. Bank Employees Federation (AICBEF).
In a letter to Sitharaman on Wednesday the two unions said the RBI's instruction restricting the withdrawal of money by the innocent depositors of Punjab & Maharashtra Co-op. Bank (PMC Bank) has resulted in a panic in the minds of customers in particular and banking public in general.
"All Banks are directly under the supervision and monitoring of the RBI. Hence, the RBI has miserably failed to take timely preventive action in this non-declaration of the default as NPA (non performing asset) by the PMC Bank," the unions said.
"Hence, the government should take a serious view and make the RBI accountable for this sad episode where the general banking public have been affected without any fault on their part. Stern action should be taken on the officials in the RBI who are responsible for this serious lapse," they added.
According to the unions, RBI and the government should take criminal action on the top management of the PMC Bank for not classifying the huge loan given to Housing Development Infrastructure Ltd. (HDIL).
"But unfortunately, instead, the innocent customers of the Bank are being punished now with the RBI's ban instructions limiting the withdrawal to INR 1,000. This is really unfair and obnoxious on the part of the RBI to do so," the unions told Sitharaman.
Several account holders of the crippled Punjab and Maharashtra Cooperative (PMC) Bank filed a joint police complaint on Thursday against the bank's chairman and its directors for alleged misappropriation of funds of the customers, a police officer said.
A delegation of account-holders went to Sion police station in central Mumbai and submitted the complaint against officials of the bank, on which the RBI has imposed operational restrictions, he said.
The delegation in its complaint alleged that at least 14 people, including the PMC Bank's chairman and all its directors, were involved in misappropriation of funds of the account holders, he said.
They requested the police to take proper action against those named in their complaint and confiscate their passports, so that they are not able to escape from the country, the official said.
They also sought an explanation from the bank's chairman and directors over misappropriation of funds of the customers, he said.
"We have receiveda written application from account holders of the PMC Bank. Further action will be taken after examining the complaint," the police officer said.
The Reserve Bank of India (RBI) on Tuesday imposed operational restrictions on the PMC Bank.
As per the RBI's directions, withdrawals have been capped at Rs 1,000 per account and the bank is not allowed to make any fresh loans.
"The issue of the directions by the Reserve Bank should not, per se, be construed as cancellation of its banking licence. The bank will continue to undertake banking business with restrictions till further notice/instructions," the RBI said in a notification.
The restrictions will be in force for six months, the RBI said.
According to PMC Bank's website, the lender was awarded the scheduled status in 2000 and has a presence in multiple states.
On Wednesday, the bank tried to allay fears of the depositors and customers, saying it has enough liquidity to meet all liabilities and every penny of the public is secure.
Asserting that all its loans are fully secured, the management admitted that one large account - HDIL- is the sole reason for the present crisis.
