Economy

Restrictions on PMC Bank extended

The Reserve Bank of India (RBI) has extended the restrictions imposed on Punjab and Maharashtra Cooperative Bank by another three months, till June 22.

“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.All other terms and conditions of the directives under reference shall remain unchanged. has it is closely monitoring the situation and efforts to on to draw a revival plan for the bank,” the RBI said.

The bank was put under restrictions for six months on September 23, 2019. Deposit withdrawal was initially capped at ₹1,000 and later raised to ₹50,000 in phases. Following the increase in withdrawal cap, 78%of the depositors of the bank were in a position to withdraw their entire account balance.

The RBI said it has been closely monitoring the situation and has held meetings with the Administrator and the bank’s Advisory Committee. It added that it has also been discussing with “various authorities on expeditious sale of securities and recoveries of loans. Due to various factors, tangible outcomes are taking... time.” It added that unlike in the case of commercial banks, it has no powers to draw up an enforceable scheme of reconstruction of a cooperative bank.

“Nevertheless, in the interest of the depositors and the stability of the cooperative banking sector, the Reserve Bank of India, in consultation with various stakeholders and authorities, is trying to work out a scheme for revival of the bank. In order to take this forward, it is considered necessary to extend the aforesaid Directions for a further period of three months,” RBI added.

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Printable version | Mar 31, 2020 7:42:27 PM | https://www.thehindu.com/business/Economy/restrictions-on-pmc-bank-extended/article31131215.ece

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