Mumbaikars received a pre-festive season shock on Tuesday, with the Reserve Bank of India (RBI) imposing a cap on withdrawals from the Punjab and Maharashtra Cooperative (PMC) Bank. Most of the bank’s branches are located in the city.
Of the 137 branches of PMC Bank, 81 are located in Mumbai and its adjoining areas of Thane, Navi Mumbai and Palghar. The RBI has barred the urban cooperative bank from carrying out any kind of business transactions and capped the amount that its depositors can withdraw from the bank. Account holders have not been allowed to withdraw more than ₹1,000 from their accounts.
The restrictions apply to savings, current and deposit accounts, subject to conditions stipulated in the RBI directions. The bank will also not be able to grant loans and advances, incur liabilities and accept fresh deposits without prior written approval from the RBI.
Left penniless
Urmila Sakhpal (19), a student of DY Patil College who has a savings account with the bank, said, “I am left with no money. My parents live in Palghar and just yesterday my father transferred ₹2,000 to me. I cannot withdraw it now given the new circumstances. As a student, I need cash every day for travel, food and shopping.”
Ms. Sakhpal, who lives with her aunt, said, “I don’t have any other bank account and ₹1,000 won’t last very long, so I don’t know what to do. I have not even spoken to my parents about it. I am hassled right now, but I don’t want to think about what will happen to me next.”
Davindar Singh (26), another account holder, said, “The fact that I can only withdraw ₹1,000 is a huge problem for me because Diwali is round the corner, and it is a time when everyone needs cash. This is not the only account I have but this is where my savings are and my salary is deposited.”
Another customer of the bank, Kailash Thapar, a senior citizen, said, “I have a locker at the Sion branch of PMC Bank and have been waiting in the queue since morning to access my belongings. I paid my grandchild’s school fees of ₹3,000 yesterday by cheque and now it will bounce. My money is now trapped and I can’t use it.”
The bank’s financial health was not something to worry about, which is why most customers have been blindsided by the recent clampdown.
The bank made a profit of ₹99.69 crore in financial year 2018-19. Its net non-performing assets ratio is 2.19% as of March end, with a capital adequacy ratio of 12.62%. RBI has not cited reasons for the clampdown.
