In yet another blow to the customers of crisis-hit Punjab and Maharashtra Cooperative (PMC) Bank, the Reserve Bank of India (RBI) on Saturday (March 21) extended the regulatory restrictions on PMC for three more months till June 22, 2020.
It may be recalled that a six-month regulatory restriction was placed on PMC Bank by RBI on September 23, 2019 after the detection of several financial irregularities, hiding and misreporting of loans given to banrupt real estate developer HDIL.
"It is hereby notified for the information of the public that the validity of the directive dated September 23, 2019, as modified from time to time, has been extended for a further period of three months from March 23, 2020 to June 22, 2020, subject to review," the RBI said in a release.
Notably, the RBI has no powers to come up with a scheme for reconstruction of a crisis-hit cooperative bank but the central bank can do that for nationalised and commercial banks.
"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," it said.
The restrictions imposed by RBI came a blow to PMC Bank as it also stopped the bank from lending and accepting fresh deposits. The board and the management of the bank was also superseded by RBI and an ex-RBI official was appointed as the administrator at the bank to take care of the management of the bank and bring it out of the crisis.