PMC Bank: RBI bars Co-operative bank from doing business for 6 months. Here's what it mean
PMC Bank Restricted: The Reserve Bank of India (RBI) on Tuesday barred Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) from carrying out "any kind of business transactions" for six months for violating of various regulations. The RBI has also put limits on the amount that can be withdrawn by depositors from the urban co-operative bank, sparking state of panic among the bank's depositors.
The PMC bank account holders are not allowed to withdraw more than ₹1,000 from their accounts. The restriction has been levelled on the savings and current accounts or any deposit accounts, subject to conditions stipulated in the RBI Directions.
PMC Bank had deposits and advances aggregating ₹11,617 crores and ₹8,383 crores--as at March-April 2019, respectively.
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Why RBI Restricted PMC Bank?
PMC Bank barred from doing business for 6 months
The Central bank imposed restrictions on the Urban co-operative PMC Bank under Sub-section (1) of Section 35A of the Banking Regulation Act in the exercise of powers vested in it. However, RBI did not cancel the licence of PMC Bank.
In a statement on Tuesday, the PMC Bank's Managing Director (MD) Joy Thomas said RBI has put the bank under regulatory restrictions to irregularities disclosed to the apex bank.
"As the MD of the Bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months," Thomas told the banks' thousands of distressed customers.
RBI Restricts PMC Bank: What does it mean?
- The Reserve Bank of India imposed operational restrictions on Punjab and Maharashtra Co-operative Bank (PMC Bank).
- From today, the PMC bank has to follow the RBI directions for its banking business
- The bank can not carry out any kind of business transactions for six months from the close of business of the bank on September 23.
- Depositors will not be allowed to withdraw the amount exceeding Rs 1000 per account, during the period of restrictions.
- The PMC bank will not be able to grant any loans and advances, without prior approval in writing from RBI.
- PMC Bank has been barred from making any investment, incur any liability including borrowal of funds.
- The bank with 137 branches across the country, cannot accept fresh deposits until the restriction is lifted by the RBI.
- The bank should not transfer or dispose of any of its assets or properties except as notified by RBI in the directions.
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