Faced with Protests, RBI increases withdrawal limit to Rs. 10,000: PMC Bank

Account holders filed a police complaint against Bank officials on Thursday

PMC bank

The Reserve Bank of India (RBI) has increased the withdrawal limit to Rs. 10,000 in six months for Mumbai-based Punjab and Maharashtra Co-Operative Bank (PMC Bank)  customers, as compared to the previously decided Rs. 1000 as per the news agency, ANI.

The development comes after protests from PMC Bank customers in past two days following the RBI’s move to let the co-operative bank’s customers withdraw only a sum of Rs. 1,000 from their accounts over the next six months imposing several restrictions.

The RBI said in its statement that more than 60 per cent of PMC Bank depositors will be able to withdraw their entire account balance. The ‘relaxation’ has been granted with a view to “reducing the hardship of the depositors”, the central bank said.

The RBI also said it is “closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank”.

The RBI had on Tuesday imposed restrictions on PMC Bank 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 sudden move led to protests and long queues outside PMC Bank branches. Punjab and Maharashtra Co-Operative Bank has 137 branches spread across seven states in the country.

India has more than 1,500 small urban co-operative banks that typically service small local communities in certain districts or states.

Over two dozen of these co-operative banks are now under the RBI’s administration, but PMC Bank – with deposits of Rs. 11,617 crore as of March 31 – is by far the largest to be hit by such measures.

Earlier, several account holders of the co-operative bank filed a joint police complaint on Thursday against the bank’s chairman and its directors for alleged misappropriation of funds of the customers, a police officer said.

Reportedly, a delegation of account holders went to Sion police station in central Mumbai and submitted the complaint against the officials of the bank.

The delegation in its complaint alleged that at least 14 people, including the PMC Bank’s chairman and all its directors, were involved in misappropriation of funds of the account holders, he said. They requested the police to take proper action against those named in their complaint and confiscate their passports so that they are not able to escape from the country, the official said.

They also sought an explanation from the bank’s chairman and directors over misappropriation of funds of the customers, he said.

“We have received a written application from account holders of the PMC Bank. Further action will be taken after examining the complaint,” the police officer said.

The Reserve Bank of India (RBI) had, on Tuesday imposed operational restrictions on the PMC Bank.

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