Relief For PMC Bank depositors, RBI Enhances Withdrawal Limit To Rs 50,000

In further relief to customers of scam-hit Punjab & Maharashtra Cooperative (PMC) Bank, the Reserve Bank on Tuesday enhanced the withdrawal limit to Rs 50,000 per account from Rs 40,000 earlier.

In September, the RBI had put restrictions on PMC for six months and allowed depositors to withdraw up to Rs 1,000 of their total balance. Since then the RBI has been raising the withdrawal limit. The depositors can now withdraw up to Rs 50,000 in one or multiple tranches till the RBI restrictions are in place.  

This is the fourth time the regulator has increased the withdrawal limit since it clamped down on PMC Bank on September 23, capping withdrawals at Rs 1,000 per customer, which led to a lot of distress and criticism. Last month the limit was enhanced to Rs 40,000 per account.

“The RBI, after reviewing the bank’s liquidity position and its ability to pay its depositors has decided to further enhance the limit for withdrawal to Rs 50,000, inclusive of Rs 40,000 allowed earlier,” the central bank said in a statement.

With the above relaxation, more than 78 per cent of the depositors of the bank will be able to withdraw their entire account balance. The RBI has also been decided to allow the depositors to withdraw from the bank’s own ATMs within the prescribed limit of Rs 50,000.

“This is expected to ease the process of withdrawals,” it added. The Reserve Bank further said it was closely monitoring the position and will continue to take further steps as are necessary to safeguard the interest of the depositors of the bank.

Punjab & Maharashtra Cooperative Bank, which is among the top 10 urban cooperative banks, was placed under an RBI administrator on September 23 for six months due to massive under-reporting of dud loans.

The bank, over a long period of time, had given over Rs 6,500 crore in loans to HDIL, which is 73 per cent of its total advances, and which has turned sour with a shift in the fortunes of the now bankrupt company.

Its total loans stand at Rs 8,880 crore and the deposits at over Rs 11,610 crore. There have been massive protests across city from the depositors following the RBI action.