Punjab and Maharashtra Cooperative Bank under RBI restrictions
24 Sep 2019
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The Reserve Bank of India has placed the Mumbai-based Punjab and Maharashtra Cooperative Bank Limited (PMC Bank) under directions, thereby restricting on withdrawals by depositors, disbursal of loans, transfer of assets or dispose of any of its properties except as directed by the RBI.
According to the directions, depositors of PMC Bank will be allowed to withdraw a sum not exceeding Rs1,000 of the total balance in every savings bank account or current account or any other deposit account, without prior approval in writing from the Reserve Bank.
PMC Bank will also “not be able to grant or renew any loans and advances, make any investment, incur any liability, including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated September 23, 2019<” RBI stated in a notification.
RBI said the directions will remain in force for a period of six months from the close of business of the bank on 23 September 2019.
The issue of the directions by the Reserve Bank should not, per se, be construed as cancellation of banking licence by the Reserve Bank. The bank will continue to undertake banking business with restrictions till further notice/instructions. The Reserve Bank may consider modifications of these directions depending upon circumstances.
PMC Bank is a multi-state scheduled urban co-operative bank with its area of operation in the states of Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh.
Founded in 1984, PMC Bank has now grown to a network of 137 branches in six states and ranks among the top 10 cooperative banks in the country.
In a statement on Tuesday, PMC Bank's managing director Joy Thomas said the bank had been put under regulatory restrictions by the RBI owing to irregularities disclosed to the apex bank.
"As the MD of the bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months," Thomas told the banks' customers. He also sought customers’ cooperation in this difficult time.
As at end-March 2019, PMC Bank had deposits and advances aggregating Rs11,617 crore and Rs8,383 crore, respectively.
