In a partial relief to the depositors of troubled cooperative lender, Punjab and Maharashtra Cooperative Bank, the Reserve Bank of India (RBI) has allowed withdrawal of deposits of ₹10,000 compared with the ₹1,000 mandated earlier.
With the relaxation, more than 60% of the depositors of the bank will be able to withdraw their entire account balance, the central bank said.
“... it has been decided to allow the depositors to withdraw a sum not exceeding ₹10,000 (including ₹1,000 wherever already withdrawn) of the total balance…” the RBI said.
On Tuesday, the banking regulator imposed various restrictions on the city-based cooperative bank to ‘protect depositors’ interest.’
“The above relaxation [increasing the deposit withdrawal limit] has been granted with a view to reducing the hardship of the depositors. The Reserve Bank 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 said.
On Thursday, the central bank said the actions were taken in view of ‘major financial irregularities.’
“The directions were necessitated on account of 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 to RBI that came to the Reserve Bank’s notice recently,” the banking regulator said.
As a result, the central bank decided to supersede the board of the bank and appointed an administrator.
Kirit Somaiya, a member of the ruling Bharatiya Janata Party, demanded criminal action against real estate developer HDIL and PMC Bank management. In a letter to the Economic Offence Wing, Mr. Somaiya alleged that HDIL started defaulting in the first half of 2018 and the bank extended loan to the company even after the defaults.
