PMC Bank crisis: RBI hikes withdrawal limit from Rs 1,000 to Rs 10,000; over 60% depositors will be able to withdraw full amount

The Reserve Bank of India has increased the withdrawal limit for account holders in the crisis-hit Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) to Rs 10,000 from Rs 1,000 earlier, in a relief to the bank’s harried customers. Other terms and conditions of the directive remain unchanged. With this relaxation, more than 60 percent of the depositors of the Bank will be able to withdraw their entire account balance. The above relaxation was granted with a view to reducing the hardship of the depositors, the RBI statement said. The Reserve Bank is 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.

#Breaking | @RBI confirms CNBC-TV18 newsbreak of increasing withdrawal limit at PMC Bank pic.twitter.com/aIRRgQdMnm

— CNBC-TV18 (@CNBCTV18Live) September 26, 2019

The RBI had placed PMC Bank under directions for six months from the close of business of the bank on 23 September 2019. The RBI issued the directives on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various Off-site surveillance reports to RBI that came to the Reserve Bank’s notice recently. [caption id=“attachment_7404161” align=“alignleft” width=“380”]  PMC Bank. PTI photo[/caption] The Board of the bank has also been superseded under subsections (1) and (2) of Section 36 AAA read with Section 56 of the Banking Regulation Act, 1949 and an administrator has been appointed. The administrator is taking necessary steps in this regard, the release from the RBI said. According to the directions on 23 September, depositors were allowed to withdraw a sum not exceeding Rs 1,000 of the total balance in every savings bank account or current account or any other deposit account.