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RBI extends PMC Bank moratorium by another three months

According to the RBI, it has been, directly and through the Administrator, discussing with various authorities on expeditious sale of securities and recoveries of loans. “Due to various factors including legal processes, tangible outcomes are taking some time,” the RBI said.

By: ENS Economic Bureau | Mumbai | Published: March 22, 2020 1:59:06 pm
PMC bank, PMC bank fraud, PMC Bank scam, PMC scam, PMC Bank Mumbai, Mumbai news, city news, Indian Express Depositors of Punjab and Maharashtra Cooperative (PMC) Bank display placards during a protest over the bank’s crisis, outside the Reserve Bank of India building, in Mumbai. (Photo: PTI)

The Reserve Bank of India (RBI) has extended the moratorium on Punjab and Maharashtra Co-operative Bank (PMC Bank) for another three months — from March 23 to June 22, 2020.

According to the RBI, it has been, directly and through the Administrator, discussing with various authorities on expeditious sale of securities and recoveries of loans. “Due to various factors including legal processes, tangible outcomes are taking some time,” the RBI said.

The RBI said unlike in the case of commercial banks, the RBI has no powers to draw up an enforceable scheme of reconstruction of a co-operative bank. Nevertheless, in the interest of the depositors and the stability of the cooperative banking sector, the RBI, in consultation with various stakeholders and authorities, is trying to work out a scheme for revival of the bank, the RBI said.

“In order to take this forward, it is considered necessary to extend the directions for a further period of three months,” it said. The RBI has been closely monitoring the situation and has been holding regular meetings with the Administrator and the Advisory Committee of the bank, it said.

On September 23, 2019, the RBI slapped curbs on PMC Bank, a leading cooperative bank headquartered in Mumbai, appointed an administrator and superseded its board of directors, sending shock waves among thousands of its depositors. Panic-stricken customers rushed to the bank’s branches across the state and were unable to withdraw more than Rs 1,000. They had not been aware that the bank, which was under the supervisory glare of the RBI, was being milked by real estate players led by HDIL with the connivance of certain bank officials.

PMC Bank, with a deposit base of Rs 11,000 crore, has 137 branches across seven states, with 81 of these in Mumbai, Navi Mumbai, Thane and Palghar regions, 10 in Pune and 12 in the rest of Maharashtra.

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