PMC Bank: RBI ups withdrawal limit to Rs 40,000

With this relaxation, about 77 per cent of the depositors of the bank will be able to withdraw their entire balance

Published: 15th October 2019 09:12 AM  |   Last Updated: 15th October 2019 09:12 AM   |  A+A-

RBI

Reserve Bank of India (File Photo | PTI)

By Express News Service

MUMBAI: The Reserve Bank of India (RBI) on Monday enhanced the withdrawal limit to Rs 40,000 from Rs 25,000 per account holders of the Punjab and Maharashtra Co-operative Bank (PMC Bank).

This 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.

However, the depositors are not convinced over these piecemeal relaxations from the RBI, and are pressing for a detailed revival plan for the bank and assurance on their deposits.RBI said the Rs 40,000 limit would enable 77 per cent of the depositors to withdraw their entire account balance.

“The financial position of the bank has been substantially impaired due to fraud perpetrated on it by certain persons,” RBI said, pointing to its action in regards to appointing an administrator and ensuring the bank’s resources are protected.

Earlier, Finance Minister Nirmala Sitharaman had spoken to the RBI governor and he assured that customers’ interest will be protected. She had urged expediting payments to the affected customers. 

“The government has been on its toes to ensure that the legal process does not slowdown for want of assets. My appeal to the governor was if there are adequate assets, is there a way in which RBI can expedite paying customers, who are genuinely suffering,” she said.

When asked about the issue of credit insurance, the finance minister clarified that any move to increase the deposit insurance limit beyond Rs 1 lakh would need Parliament’s approval. Citing a technical point, she said that a Rs 1 lakh deposit insurance could be invoked only when one treats the matter (PMC Bank) as a closed case and not as a “going concern”.

“If the attempt is to keep it as a going concern, then you cannot invoke it and not give that Rs 1 lakh,” she said. 

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