MUMBAI, Jun 20: The Reserve Bank of India (RBI) has raised withdrawal limit from fraud-ridden Punjab and Maharashtra Cooperative (PMC) Bank to Rs one lakh from Rs 50,000 while extending restrictions imposed on the bank for another six months.
The restrictions, which were earlier imposed till June 23, would now be applicable until December 22, 2020.
RBI said on Friday said that after a review of the bank’s liquidity position, its ability to pay the depositors and to help depositors mitigate the difficulties faced during the prevailing COVID-19 situation, it has decided to raise the withdrawal limit to Rs 1 lakh per depositor.
With this relaxation, over 84 per cent of the bank’s depositors would be able to withdraw their entire account balance.
Reserve Bank has been engaging with the stakeholders to explore the possibility of a resolution of the bank. However, the process has been affected due to the lockdown on account of COVID-19 and the continuing uncertainty around the pandemic.
Further, the extent of the negative net worth of the bank, and the legal processes involved in the recovery of bad debts also pose challenges/limitations in the resolution of the bank,”an RBI release said.
It added, “Nevertheless, consultation with various stakeholders and authorities for resolution of the bank is continuing. It is, therefore, considered necessary to extend the aforesaid Directions for a further period of six months to take the process forward.”
On September 23, 2019, the RBI had placed curbs on the Mumbai-headquartered PMC Bank after identifying financial irregularities and fraudulent operations. The cooperative bank’s board was superseded and an administrator was appointed.