RBI places withdrawal curbs on depositors of PMC Bank


EX-CGM of the banking regulator appointed administrator

In a surprising move, the Reserve Bank of India (RBI) has imposed restrictions on Punjab and Maharashtra Co-operative (PMC) Bank, under which the depositors cannot withdraw more than ₹1,000 from their accounts.

A former chief general manager (CGM) of the central bank has been appointed as an administrator.

The directions, which have been imposed under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949, also barred the lender from extending any fresh loans or making any investments, except in government securities. The lender will be allowed to pay salaries to the staff, as also rent. The bank is also allowed to renew term deposits on maturity in the same name.

“According to the directions, depositors will be allowed to withdraw a sum not exceeding ₹1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called,” the RBI said.

The curbs will remain for six months from September 23 and could be extended further if the central bank desires so.

PMC Bank is a multi-State scheduled urban co-operative bank with operations in the States of Maharashtra, Delhi, Karnataka ,Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. Started in 1984 as a single branch bank, it now has 137 branches across six States.

The move came as a surprise because the bank’s financials were not in a bad shape. It had made a net profit of ₹99.69 crore in 2018-19 compared with ₹100.90 crore in the previous year.

The net non-performing asset ratio of the bank was 2.19% as at end March 2019, much lower than many public sector banks. The deposit base of the bank was ₹11,617 crore as on end March 2019 - registering a growth of 17% on-year while advances growth was 13% to ₹8383 crore.

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Printable version | Jan 29, 2020 7:27:40 PM |

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