RBI increases PMC account withdrawal limit to Rs 1 lakh, extends restrictions by 6 months

MUMBAI: In a big relief for hundreds of its account holders, the Reserve Bank of India on Friday increased the withdrawal limit for depositors at the crisis-hit Punjab and Maharashtra Cooperative Bank (PMC Bank) to Rs 1 lakh from Rs 50,000.

The apex bank also extended the restrictions by another six months to December 23, 2020, as the resolution process of the lender has been affected by the COVID 19-induced lockdown, the RBI Bank said in a press release.

"Further, on a review of the bank's liquidity position, its ability to pay the depositors and with a view to mitigating the difficulties of the depositors during the prevailing COVID-19 situation, it has also been decided to further enhance the limit for withdrawal to Rs 1,00,000 (Rupees One Lakh only) per depositor, inclusive of Rs 50,000 allowed earlier," RBI said in a press release.

RBI noted that with the relaxation in withdrawal limit, 84 per cent of the depositors of the bank will be able to withdraw their entire account balance.

It may be noted that the RBI had imposed restrictions on PMC Bank in September last year citing "major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various Off-site Surveillance reports". Putting the co-operative bank under its lens, the RBI barred PMC Bank from renewing or granting any loans, or making investments without its prior approval.

The bank, over a long period of time, had given over Rs 6,500 crore in loans to HDIL, which is 73 per cent of its total advances, and which has turned sour with a shift in the fortunes of the now-bankrupt company.