RBI puts Mumbai Based PMC Bank under Directions
Bank account holders of the RBI restricted Punjab and Maharashtra Cooperative Bank (PMC Bank) are in a state of panic as restrictions are imposed on the customers and they can’t withdraw more than Rs. 1000 for 6 months. The limits have been put on the withdrawal from the urban co-operative bank by the apex institute of Reserve Bank Of India on Tuesday, 24th September 2019.
The frightened account holders have been spotted in widespread chaos and panic outside the branches as the central bank has imposed its exercise of powers vested in it under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 with the Section 56 of the said Act. The issue of directions, however, cannot be constructed as the withdrawal of license by the Reserve Bank as the bank will continue to undertake baking business with restrictions until further notice or instructions.
The restrictions have been levied on the saving and current accounts or any deposit accounts, subject to conditions stipulated in the RBI directions. The bank will also not able to grant or renew any loans and advances, make any investment, incur any liability including borrowing funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated September 23, 2019 without prior approval in writing from the Reserve Bank.
The urban co-operative bank has 137 branches across India with its areas of operations in Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh, and Madhya Pradesh. The deposits and advances of PMC were aggregating to Rs. 11,617 crores and Rs. 8383 crores, respectively as at March 2019.