Even as two harried depositors passed away in the last two days, Punjab and Maharashtra Co-operative Bank Administrator JB Bhoria has said the bank is making all efforts to stabilise its operations and the cash withdrawal limit has already been hiked to Rs 40,000 per account.
“With the above relaxation, about 77 per cent of the depositors of the bank will be able to withdraw their entire account balance,” the RBI had said on Monday while increasing the cash withdrawal limit to Rs 40,000 per account from Rs 25,000 earlier.
“We are trying our level best for normalcy. We will do whatever is possible …,” Bhoria told The Indian Express on Tuesday.
When asked whether the bank will relax the withdrawal limit in the case of two depositors who died in the last two days and other needy customers, Bhoria, who was earlier Regional Director and Chief General Manager with the RBI, said, “We will strictly follow the RBI directions. The RBI has to decide about any relaxation.”
When contacted, RBI spokespersons did not respond to email and telephone queries.
PMC account holder Fattomal Punjabi, a resident of Mulund, suffered the cardiac arrest on Tuesday. On Monday, Sanjay Gulati, an account holder at the PMC Bank who had deposited over Rs 90 lakh with the troubled bank, suffered a heart attack hours after he attended a protest by distressed customers.
On the issue of non-performing assets and HDIL group exposure, Bhoria said, “We are going through the records … it’s yet to crystallise.” The bank’s exposure to the HDIL group is estimated to be around Rs 6,200 crore.
However, banking experts said if customers resort to large scale withdrawals from the bank, it will be difficult for the bank to function. “A bank operates on depositors’ money. If depositors pull out everything, it can’t function. In PMC’s case, it will be tough for the bank to attract fresh deposits in the near future. The options before the RBI may be merger with another bank or winding up,” said an official of a nationalised bank.
On Monday, the RBI had said forensic auditors have been appointed by the Administrator of the bank to look into the related transactions. “The Administrator and the 3-member Advisory Committee appointed by the RBI are working for speedier resolution of the various issues being faced by the bank in conducting its operations,” it said. The RBI Annual Report says 1,542 urban co-operative banks were operating in the country as of March 2019. Out of these, 46 UCBs had negative net worth and 26 UCBs were under directions — with curbs on their operations — of the Reserve Bank.
During 2018-19, six proposals for mergers of UCBs were processed by the RBI. Of these, two merger proposals were approved and are awaiting final approval of the concerned Registrars of cooperative societies and one was rejected. The remaining three merger proposals are presently under process. The licenses of 4 weak UCBs were cancelled during the period of review, according to the RBI Annual Report.
While slapping restrictions on the bank for six months on September 23, the RBI had allowed withdrawal of only Rs 1,000 for the bank’s depositors, creating panic among the depositors. However, on September 26, following a spate of complaints from depositors, the RBI relaxed the curbs and allowed depositors to withdraw a sum not exceeding Rs 10,000 (including the Rs 1,000 already withdrawn) of the total balance. This was further increased to Rs 25,000 on October 3. “The financial position of the bank has been substantially impaired due to fraud perpetrated on it by certain persons,” it said on Monday. “The Reserve Bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank,” the RBI said.
On September 23, the RBI superseded the board of the bank and appointed JB Bhoria as administrator of PMC Bank to take appropriate measures to bring the bank back on the rails. PMC Bank, which has a deposit base of Rs 11,617 crore, has 137 branches spread across seven states with 81 branches in Mumbai, Navi Mumbai, Thane and Palghar regions, 10 branches in Pune and 12 branches in rest of Maharashtra. The bank reported total advances of Rs 8,383.33 crore as on March 31, 2019.