PMC Bank: RBI doubles withdrawal limit to Rs 1 lakh

PMC Bank: RBI doubles withdrawal limit to Rs 1 lakh

The Reserve Bank of India (RBI) on Friday enhanced the withdrawal limit for the customers of Punjab and Maharashtra Co-operative (PMC) Bank to Rs 1 lakh from Rs 50,000. The banking regulator has also extended the restrictions on PMC Bank by six months till December 22, 2020. The restrictions on PMC Bank included barring the bank from lending and accepting fresh deposits, among others.

“With the above relaxation, more than 84% of the depositors of the bank will be able to withdraw their entire account balance,” RBI said. The Reserve Bank had been engaging with the stakeholders to explore the possibility of a resolution of the bank.

“However, the process has been affected due to the lockdown on account of Covid-19 and the continuing uncertainty around the pandemic,” RBI further said. The regulator also said that there were challenges due to negative net worth of PMC bank, and the legal processes involved in recovery of bad debts. However, RBI will continue its efforts to find a resolution for the bank.

The central bank on November 5 had enhanced the withdrawal limit for PMC Bank depositors to Rs 50,000 from the previous cap of Rs 40,000. RBI had put a six-month regulatory restriction on the bank on September 23, 2019, after finding out certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL. These restrictions were further extended by three months in March, 2019.