MUMBAI: Harried customers thronged Punjab & Maharashtra Co-operative Bank branches on Tuesday after RBI imposed restrictions on withdrawal and acceptance of deposits by the multi-state urban co-operative bank. The Mumbai-headquartered bank’s account holders can now withdraw only Rs 1,000 per person and only once in the six-month period of restriction.
Without divulging the reasons, RBI said it was necessary to “issue certain directions” in the interest of the public. Sources say the RBI action was based on detection of irregularities in loan disbursal and potential bad loan worries.
Sources said RBI had “detected potential bad loans which could push up PMC’s non-performing asset ratio way above what was declared in the annual report”. RBI may relax the withdrawal limit or the restrictions after taking stock of the liquidity situation, bad loans etc., they added.
In a message to account holders, PMC Bank MD Joy Thomas said the bank has been put under regulatory restriction under Section 35A of the Banking Regulation Act for six months due to irregularities disclosed to RBI.
The bank has 137 branches across Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. As of March-end, the bank had deposits to the tune of Rs 11,617 crore and advances of Rs 8,383 crore.