A large number of Punjab and Maharashtra Cooperative (PMC) Bank depositors are yet to tap the ₹50,000 withdrawal limit per account, stipulated by the Reserve Bank of India (RBI).
Just ₹400 crore has been withdrawn from PMC Bank in the past two months, as opposed to an estimated ₹1,300 crore outflow from the entity after the RBI relaxed withdrawal limits for its account holders in November 2019.
The troubled bank was placed under RBI restrictions due to financial irregularities in September 2019, and the withdrawal limit was initially set at a meagre ₹1,000 per account before being enhanced gradually.
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The banking regulator expected more than 78% of the bank’s depositors to be able to withdraw their entire account balance with the ₹50,000 cap, but data suggests many are staying with the bank for now, reducing immediate pressure on the bank on the payouts front.
“This would mean smaller depositors are not so much worried about their money. Only the bigger depositors, who have deposit of over ₹1 crore are more worried,” said a source.
The number of depositors having deposits above ₹1 crore is 635. Apart from individual depositors, there are many housing societies, employee societies and religious trusts with deposits of ₹1 crore and above. These also include two employee societies of the RBI, with total deposits of around ₹200 crore.
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The RBI’s restrictions had caused panic and triggered widespread protests among depositors, as PMC Bank is a reasonably large cooperative lender with a deposit base of ₹11,617 crore as on March 2019.
HDIL loan principal
While securitised assets of the bank’s top defaulting borrower HDIL are being formally valued, it is expected that these assets may be able to cover the principal loan dues from HDIL.
The total outstanding due of HDIL to the bank are around ₹6,500 crore, which account for over 73% of PMC’s total assets. However, sources said the principal amount was only ₹2,000 crore and the remaining part is accrued interest accumulated over the years.
It was alleged that PMC had extended loans to real estate developer HDIL which had defaulted some years back, but the bank had not classified the loan as non-performing.
A process to find the realisable value of HDIL securities in PMC Bank’s custody, is now underway. Initial indications are that the realisable value of those securities could be to the tune of ₹2,000 crore.
A forensic audit of PMC Bank’s troublesome loan accounts, including the HDIL account, is currently underway. RBI expects the final report of the forensic audit this month, following which the future course of action will be decided.