he Reserve Bank of India has put limits on amount that can be withdrawn by depositors from the urban co-operative bank.
The Reserve Bank of India has placed Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) under Directions for six months from the close of business of the bank on September 23, 2019.
In a statment bank said – I, Mr. Joy Thomas, M.D., regret to tell you that your PMC Bank has been put under regulatory restriction under Section 35A of B.R. Act by RBI for a period of 6 months due to irregularities disclosed to RBI. As the M.D. of the Bank, I take the responsibility and assure all the depositors that these irregularities will be rectified before the expiry of 6 months. All efforts are made to remove the restrictions by rectifying the irregularities. I know it is a difficult time for all of you and any apology may not restore the pain you are undergoing. Please co-operate with us. We assure that we will definitely overcome this situation and stand strong.
The depositors will be allowed to withdraw a sum not exceeding ₹1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directions.
Without the prior approval in writing from the Reserve Bank, the Urban Co-operative 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, pay out or agree to pay 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.
The central bank, in a statement, said, the issue of the directions should not, per se, be construed as a cancellation of a banking licence by the Reserve Bank. The bank will continue to undertake banking business with restrictions until further notice/instructions. The Reserve Bank may consider changes of these directions depending upon circumstances.
The RBI said the directions are imposed in exercise of powers vested in it under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the said Act.
As at March-end 2019, PMC Bank had deposits and advances aggregating ₹11,617 crore and ₹8,383 crore, respectively.
The 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. It has 137 branches.