The Reserve Bank of India (RBI) on Friday announced that the restrictions on withdrawals and deposits in the scam-hit Punjab and Maharashtra Cooperative (PMC) Bank have been extended till June 30, 2021. The restrictions on the bank’s activity were first placed in September 2019, after the central bank took cognisance of a major financial irregularity. The restrictions were consecutively extended, and were set to expire on March 31, 2021.
The RBI, however, has decided to maintain the status quo for at least three more months. In this period, it would continue to engage with prospective investors for the bank’s reconstruction. PMC Bank had received binding offers from certain investors for its reconstruction, in response to the expression of interest (EOI) floated by the bank on November 3 last year.
“RBI and PMC Bank are presently engaging with prospective investors in order to secure best possible terms for the depositors and other stakeholders while ensuring long term viability of the reconstructed entity,” the central bank said in an order issued on March 26.
“Given the financial condition of the PMC Bank, the process is complex and is likely to take some more time,” it added. In the circumstances, it is considered necessary to extend the restrictions for a “further period from April 1, 2021 to June 30, 2021, subject to review”, the RBI further said.