Chaos among depositors as PMC Bank in crisis

The Reserve Bank of India (RBI) has barred Mumbai-headquartered Punjab & Maharashtra Cooperative Bank Ltd (PMC Bank) from carrying out majority of its banking transaction for a period of six months for alleged irregularities.

From the close of business on 23 September, depositors were not allowed to withdraw a sum exceeding Rs 1,000.

There is chaos and confusion outside the branches of the bank in Mumbai, the larger Mumbai Metropolitan Region (MMR) besides other places - as depositors rushed to the bank to get their money back.

"We are ruined, at least give some of the deposit back," an agitated customer said outside the bank's branch at GTB Nagar.

While some of the depositors were agitated, some were seen breaking down.

ALSO READ: RBI curbs withdrawals over Rs 1,000/day at PMC Bank

Coming ahead of the festive season of Dassera and Diwali, for depositors and regular customers, it is bolt from the blue.

The Maharashtra BJP unit has already taken up the issue with the RBI and the Finance Ministry.

"I have read notices about PMC Bank, regulatory order, limiting withdrawal upto ₹1000, I have taken up up the issue with ministry and RBI," former BJP MP Dr Kirit Somaiya said.
Described as a multi-state urban cooperative banking entity, the PMC Bank has branches in Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh.
Founded in 1984, it has 137 branches.

The PMC Bank has barred from granting, renewing and loans and advances, make any investments, incur any liability including borrowal of funds, or accept fresh deposits, etc, without the prior written approval from RBI, according to a circular issued by RBI executive director Rabi N Mishra.

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," RBI's chief general manager Yogesh Dayal said in a press statement.

The directions are imposed in exercise of powers vested in the Reserve Bank under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the act.

"@PMC_Bank says they are under 35A of BR by the @RBI and the thing is I have all my savings stuck in that bank and they say I can not withdraw my money now.. What do I do.. People here have all their savings in the bank and the bank says they can’t help," customer Avinash Sharma tweeted.
Another customer Praful Shah tweeted: "#PMCBank

Its nothing but bankruptcy. My 25 lakhs, saved for daughters' marriages, are now trapped. My lifetime saving getting washed out overnight. Feeling sad."