NEW DELHI: Stuck for nearly a year and with no immediate resolution in sight, fraud-hit Punjab and Maharashtra Cooperative Bank (PMC) has approached the central government to help the management in
coming out of the mess.
According to the sources in the finance ministry, the bank has asked the government to help them in getting funds as they are unable to raise money on its own.
“The depositors’ money is still stuck as the bank do not have adequate fund. The management tried to raise money and is even working for mergers but nothing has materialised so far. The bank wants the government to help in persuading the market and other banks to help come out,” said a senior finance ministry official.
After the investigative agencies detected a fraud in PMC last year, the Reserve Bank of India (RBI) took control and capped withdrawals. Consequently, thousands of PMC depositors have not been unable to access their deposits since last one year.
Last month, the RBI told the Delhi High Court that currently it would not be possible to raise the withdrawal limit beyond Rs 1 lakh imposed on the bank, citing lack of liquidity as against a total deposit liability of Rs 10,000 crore as on March 26, 2020, liquid assets available with the PMC bank were to the tune of Rs 2,955.73 crore which is “grossly insufficient” to fully pay all its depositors, as reasons.
As suggested by a Reuters report, PMC Bank had approached other banks over a “possible merger” as its effort to recover funds from a big borrower has been disrupted by the coronavirus outbreak, the bank’s administrator said in a court filing on September 10.
And while this case prompted the government to pass the Banking Regulation (Amendment) Bill in the Lok Sabha, by bringing cooperative banks under the purview of RBI, no action has been initiated to give relief to the depositors of PMC bank.