Irate and anxious customers swarmed offices of the Mumbai based PMC (Punjab and Maharashtra Co-Operative Bank Limited) bank branches as many depositors found out they could not withdraw their own money, leading to outbreak of complete chaos.
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A hapless citizen said, “PMC Bank stops functioning, people crying outside bank branches, Kandivali (Charkop) branch a business man’s cheque of 10 lakhs got credited today and bank shut operations!!! He fainted as he had to make payment today to his supplier, Very bad state”
The Reserve Bank of India has placed the bank under restrictions, suddenly disallowing the bank from conducting carrying out any kind of business transactions on Tuesday. This has sparked a state of panic among the banks depositors and sent shock waves in city trading community which uses this bank for their requirements.
Chief General Manager of the RBI, Yogesh Dayal said that as per the RBI directions, depositors cannot withdraw more than Rs 1,000 of the total balance in their savings/current/other deposit accounts. That this move has taken place without any prior notice raises serious questions over customer confidence.
The bank has been barred from granting, renewing and loans and advances, make any investments, accept fresh deposits, etc. without the prior written approval from RBI.
In a statement, the central bank has said that the issue of the directions shouldn’t be constructed as a “cancellation of a banking licence by the RBI”. And that it will continue to undertake banking business with restrictions until further notice/ instructions. Reportedly the RBI may consider these directions depending upon circumstances.
In response, the RBI said that it was exercising its powers vested in it under the Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the said Act. PMC Bank had deposits and advances aggregating ₹11,617 crore and ₹8,383 crore, respectively as at March-end 2019.
The Bank is a multi-state scheduled urban co-operative bank with its area of operation in the States of Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. It has 137 branches.