Giving further relief to depositors of beleaguered Punjab and Maharashtra Co-operative Bank (PMC), the Reserve Bank of India Monday increased the cash withdrawal limit to Rs 40,000 from Rs 25,000 earlier.
“The Reserve Bank of India, after reviewing the bank’s liquidity position and its ability to pay its depositors has decided to further enhance the limit for withdrawal to Rs 40,000. With the above relaxation, about 77% of the depositors of the bank will be able to withdraw their entire account balance,” the central bank said in a statement.
The bank was put under “directions” by the Reserve Bank of India (RBI) last month due to weak financial health due to its exposure to near-bankrupt realty player HDIL, to which it has loaned over 70 per cent of its Rs 9,000 crore in advances.
Finance Minister Nirmala Sitharaman said she was closely monitoring the developments at the PMC Bank, and the RBI Governor has assured that customers’ interest will be protected.
“The financial position of the bank has been substantially impaired due to fraud perpetrated on it by certain persons. As soon as the matter came to the notice of Reserve Bank of India, action was taken in appointing an Administrator and ensuring that the bank’s available resources are protected and not misused or diverted,” the RBI said.
The RBI said its administrator had appointed forensic auditors to look into the fraudulent transactions. The administrator, along with a three-member RBI-appointed advisory committee, is working for speedier resolution of the various issues being faced by the bank in conducting its operations, RBI said.
On October 3, the RBI had increased the cash withdrawal limit to Rs 25,000 from Rs 10,000. While slapping restrictions on the bank for six months on September 24, the RBI had allowed withdrawal of only Rs 1,000, creating panic among the depositors.
On September 26, following a spate of complaints from the depositors, the RBI relaxed the curbs and capped withdrawal at Rs 10,000 (including the Rs 1,000 already withdrawn) of the total balance held in every savings bank account or current account or any other deposit account.
The promoters of realty company HDIL the Wadhwans and also the bank’s chief executive and managing director Joy Thomas and chairman Waryam Singh have already been arrested.