RBI raises withdrawal limit to Rs 40,000 for account holders at PMC Bank

NEW DELHI: In further relief to customers of troubled Punjab & Maharashtra Cooperative (PMC) Bank, the Reserve Bank of India (RBI) on Monday enhanced withdrawal limit to Rs 40,000 per account from Rs 25,000 per account earlier for six months.nnThis is the third time the regulator has increased the withdrawal limit since it clamped down on PMC Bank on September 23, capping withdrawals at Rs 1,000 per customer, which led to a lot of distress and criticism.nnEarlier in the day, Finance Minister Nirmala Sitharaman said she is closely monitoring the developments at PMC Bank, and the RBI governor has assured that customers’ interest will be protected.nnThe Reserve Bank of India, after reviewing the bank’s liquidity position and its ability to pay its depositors, has decided to further enhance the limit for withdrawal to Rs 40,000, inclusive of Rs 25,000 allowed earlier, the central bank said in a statement.nnWith the above relaxation, about 77 per cent of the depositors of the bank will be able to withdraw their entire account balance, it said.nnThe RBI on October 3, 2019, had permitted the depositors of the bank to withdraw up to Rs 25,000 of the total balance in their accounts.nnThe RBI had initially set the withdrawal limit of Rs 1,000 per account but it was later increased to Rs 10,000 per account on September 26 for six months.nnThe statement further said the RBI is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank.nn”The financial position of the bank has been substantially impaired due to fraud perpetrated on it by certain persons. As soon as the matter came to the notice of Reserve Bank of India, action was taken in appointing an Administrator and ensuring that the bank’s available resources are protected and not misused or diverted,” it said.nnThe RBI said its administrator has appointed forensic auditors to look into the fraudulent transactions.nnThe administrator, along with a three-member RBI-appointed advisory committee, is working for speedier resolution of the various issues being faced by the bank in conducting its operations, the apex bank said.nnMeanwhile, based on a complaint filed by the bank against its officials and borrowers associated with the fraud/financial irregularities at the bank and manipulation of its books of accounts, the Economic Offences Wing, Maharashtra Police, has started its investigations into the matter, the RBI said.nnThe police had earlier pegged the scam at nearly Rs 4,500 crore and have already made a slew of arrests in the case, including the promoters of realty company HDIL the Wadhwans, and also the bank’s chief executive and managing director Joy Thomas and chairman Waryam Singh who are all behind the bars now.nnThe bank, over a long period of time, had given over Rs 6,500 crore in loans to HDIL, which is 73 per cent of its total advances, and which has turned sour with a shift in the fortunes of the now-bankrupt company.nnIts total loans stand at Rs 8,880 crore and the deposits at over Rs 11,610 crore. There have been massive protests across the city from the depositors following the RBI action.nnSource: Press Trust of India