Good news for PMC depositors: Withdrawal limit bumped

In a good news for the depositors of Punjab and Maharashtra Co-operative Bank (PMC Bank), the withdrawal limit has been enhanced from Rs 1,000 to Rs 10,000.

"It has been decided to allow the depositors to withdraw a sum not exceeding Rs 10,000 (including Rs 1,000 wherever already withdrawn) of the total balance held in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directive dated September 23, 2019," the RBI said in a statement on Thursday.

As a natural corollary to the RBI action, the current MD of the bank, Joy Thomas, stands suspended.

“The directions were necessitated on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various off-site surveillance reports to RBI that came to the Reserve Bank’s notice recently.

“Therefore, the Board of the bank has also been superseded under sub sections (1) and (2) of Section 36 AAA read with Section 56 of the Banking Regulation Act, 1949 and an Administrator has been appointed. The Administrator is taking necessary steps in this regard,”the RBI said in a statement.

“The above relaxation has been granted with a view to reducing the hardship of the depositors. The Reserve Bank is closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank,” the central bank said.

In fact, the officers of the Reserve Bank itself had their monies parked in the PMC Bank. The annual report of Reserve Bank Officers Cooperative Credit Society for FY19 says that officers have a fixed deposit of Rs 105 crore in PMC Bank.

The move to limit withdrawals came after the RBI found the irregularities in loans granted to real estate group Housing Development Infrastructure (HDIL) to the tune of Rs 2,500 crore, according to the highly placed sources.

The exposure includes a bullet payment of Rs 96.5 crore made by HDIL to settle dues with Bank of India after the latter approached National Company Law Tribunal (NCLT) in August. On August 31, Bank of India acknowledged receiving two pay orders drawn on PMC Bank as a one-time settlement from HDIL against its loans of Rs 522.3 crore.

The RBI has 137 branches across Delhi, Mumbai, Karnataka, Goa, Gujarat, Madhya Pradesh and Andhra Pradesh.