Depositors Panic As RBI Imposes Rs. 1,000 Withdrawal Limit On PMC Bank

September 24, 2019

Depositors Panic As RBI Imposes Rs. 1,000 Withdrawal Limit On PMC Bank

The Reserve Bank of India restricted PMC Bank from making any advances or loans to its customers.

Banking & Financial Services | Reported by Purva Chitnis, Edited by Abhishek Vasudev | Updated: September 24, 2019 16:29 IST

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The RBI's decision to impose withdrawal limits on PMC Bank account-holders led to a protest.

HIGHLIGHTS

PMC Bank account holders not allowed to withdraw over Rs. 1,000
Restrictions to remain in force for six months, says RBI
Account-holders protest outside bank's main branch in Mumbai

The Reserve Bank of India has put limitations on the withdrawal of amount by account-holders of the Mumbai-based Punjab and Maharashtra Co-Operative Bank (PMC Bank). The restrictions will remain in force for a period of six months starting the end of business hours on September 23, the central bank said. "The depositors will be allowed to withdraw a sum not exceeding Rs. 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," the RBI said in a press release.

The Reserve Bank of India also restricted PMC Bank from making any advances or loans to its customers.

"Without the prior approval in writing from the Reserve Bank, the 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, disburse or agree to disburse 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 RBI added.

The central bank's decision to put withdrawal limits for account-holders of PMC Bank led to protest by depositors outside the bank's main branch in Mumbai's Bhandup area and various other branches.

The Reserve Bank of India has however said that the restrictions imposed by it should not be interpreted as cancellation of PMC Bank's banking licence.

"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 RBI said.

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"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," the central bank added.

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