Current withdrawal limit of Rs 10,000 from PMC Bank not permanent, may relax cap after improvement in situation: RBI

The RBI had Tuesday imposed a slew of restrictions on PMC Bank after finding many irregularities in its books, including massive under-reporting of NPAs.

FP Staff September 27, 2019 14:41:10 IST
Current withdrawal limit of Rs 10,000 from PMC Bank not permanent, may relax cap after improvement in situation: RBI
  • RBI's clarification on the current withdrawal limit of Rs 10,000 comes as a major relief for PMC Bank account holders

  • On Thursday, the RBI increased cash withdrawal limit to Rs 10,000 per account-holder from Rs 1,000 set earlier

  • The central bank had Tuesday imposed a slew of restrictions on PMC Bank after finding many irregularities in its books

In yet another major relief to thousands of panic-stricken account holders of Punjab and Maharashtra Co-operative Bank, the Reserve Bank of India has reportedly hinted that it may relax the withdrawal limit further as the situation improves, said a media report.

The present arrangement under which the depositors can withdraw Rs 10,000 for a period of six months, is not permanent and any reports in this connection are baseless, said a report in India Today quoting an official of the Reserve Bank of India (RBI).

This indicates that the deposits of the account holders with the crippled Punjab & Maharashtra Co-operative (PMC) Bank have not been "frozen" beyond the Rs 10,000 limit for six months and RBI will review the situation from time to time, the report said.

Current withdrawal limit of Rs 10000 from PMC Bank not permanent may relax cap after improvement in situation RBI

File image of PMC Bank. PTI

On Thursday, the RBI increased the cash withdrawal limit to Rs 10,000 per account-holder from Rs 1,000 set earlier over the next six months.

The regulator also said the relaxation in withdrawals will take care of over 60 percent of the customers of the co-operative bank focused on low-income customers.

The RBI had Tuesday imposed a slew of restrictions on PMC Bank after finding many irregularities in its books, including massive under-reporting of non-performing assets (NPAs). The lender is not allowed to offer new loans or accept deposits.

The above relaxation was granted with a view to reducing the hardship of the depositors, the RBI statement said.

The RBI was closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank, the release added.

On a preliminary assessment of PMC Bank’s latest depositor and liquidity profile as furnished by the administrator, RBI has decided, in the interest of depositors, to review the directions.

"It has been decided to allow the depositors to withdraw a sum not exceeding Rs 10,000 (including Rs 1,000
already withdrawn) of the total balance held in every savings bank account or current account or any other deposit account," the RBI said.

The monetary authority said the relaxation has been granted with a view to reduce the hardships of depositors.

A customer can either withdraw Rs 10,000 in one go or can do it over a period of six months, the Reserve Bank said.

The RBI further said, the higher limit is subject to customer not having any liabilities with the bank by way of
loans or surety for third-party loans or any other liens.

"With the relaxation, more than 60 percent of the depositors of the bank will be able to withdraw their entire
account balance," the central bank said.

On Tuesday, the RBI placed Mumbai-based PMC Bank under directions for six months from the close of business of the bank on 23 September, 2019.

According to a press release on the RBI site (vide Directive dated 23 September 2019), the central bank placed the PMC Bank, Mumbai, Maharashtra, under Directions.

 

With inputs from agencies

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