RBI restrictions on PMC Bank. Depositors panic
RBI restrictions on PMC Bank. Depositors panic
Bracing limits on the amounts of withdrawl by depositors from the urban co-operative bank, the Reserve bank of India on Tuesday placed Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) under directions for six months from the close of business of the bank.
"The 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, subject to conditions stipulated in the law", the directive issued by the Central Bank read.
Further, without the prior approval in writing from the Reserve Bank, the Urban Co-operative Bank will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations, enter into any compromise, arrangement and sell, transfer, dispose of any of its properties or assets.
The central bank, in a statement, said that the issue of the directions should not be construed as a cancellation of a banking licence by the Reserve Bank. "The bank will continue to undertake banking business with restrictions until further instructions.
The Reserve Bank may consider modifications of these directions depending upon circumstances", it added.
In a statement on Tuesday, the PMC Bank's managing director (MD) Joy Thomas said the bank had been put under regulatory restrictions by the RBI owing to irregularities disclosed to the apex bank. "As the MD of the Bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months," Mr Thomas told to thousands of distressed customers of PMC Bank.
Dayanand Nene of Small Investors Forum asked people not to panic and await resolution of the problem. Crowding the bank will not help their cause.
Bracing limits on the amounts of withdrawl by depositors from the urban co-operative bank, the Reserve bank of India on Tuesday placed Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) under directions for six months from the close of business of the bank.
"The 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, subject to conditions stipulated in the law", the directive issued by the Central Bank read.
Further, without the prior approval in writing from the Reserve Bank, the Urban Co-operative Bank will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations, enter into any compromise, arrangement and sell, transfer, dispose of any of its properties or assets.
The central bank, in a statement, said that the issue of the directions should not be construed as a cancellation of a banking licence by the Reserve Bank. "The bank will continue to undertake banking business with restrictions until further instructions.
The Reserve Bank may consider modifications of these directions depending upon circumstances", it added.
In a statement on Tuesday, the PMC Bank's managing director (MD) Joy Thomas said the bank had been put under regulatory restrictions by the RBI owing to irregularities disclosed to the apex bank. "As the MD of the Bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months," Mr Thomas told to thousands of distressed customers of PMC Bank.
Dayanand Nene of Small Investors Forum asked people not to panic and await resolution of the problem. Crowding the bank will not help their cause.
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