In Relief for PMC Bank Account Holders, RBI Hikes Withdrawal Limit from Rs 10,000 to Rs 25,000
This is the second time the regulator has increased the withdrawal limits since its clampdown on the bank on September 23 when it had capped it to Rs 1,000 per customer which led to widespread distress.
Mumbai: The Reserve Bank of India on Thursday enhanced the withdrawal limits for depositors of the scam-hit Punjab & Maharashtra Cooperative Bank to Rs 25,000 from Rs 10,000 per account over the next six month.
This is the second time the regulator has increased the withdrawal limits since its clampdown on the bank on September 23 when it had capped it to Rs 1,000 per customer which led to a lot of distress and criticism.
Since then PMC, which has among the top 10 cooperative banks with a deposit of over Rs 11,600 crore, is under an administrator appointed by the RBI while the past management is being probed by the economic offences wing of the city police.
Earlier in the day, two directors of the Housing Development and Infrastructure Limited (HDIL) — Rakesh Wadhawan and his son Sarang Wadhawan — were arrested in connection with the fraud.
The RBI said in a statement, "We again reviewed PMC Bank's liquidity position and with a view to reducing the hardship of depositors, have decided to further enhance the limit for withdrawal to Rs 25,000 (during the pendency of the six months operational restrictions on the bank)."
With the above relaxation, more than 70 percent of the depositors of the bank will be able to withdraw their entire account balance, the central bank said as most of its account holders have an average balance of just about Rs 10,000. The total retail despot is worth Rs 915 crore.
The regulator further said it has also decided to appoint a three-member committee to assist the administrator JB Bhoria. The RBI is monitoring the position of the bank very closely and will continue to take necessary steps in the interest of depositors, it added.
On September 23, it had put regulatory restrictions on the bank after finding irregularities, and misreporting of loans given to real estate developer HDIL, with whom it has an exposure of a whopping 73 percent or Rs 6,500 crore of its total loan book of Rs 8,880 crore. The entire loan has been NPA for the past two-three years.
The restriction included barring the bank from lending and accepting fresh deposits. It also superseded the board and the management of the bank and appointed an ex-RBI official as the administrator at the bank.
The RBI had initially set the withdrawal limit of Rs 1,000 per account but it was later increases to Rs 10,000 per account on September 26 for six months.
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