The Reserve Bank of India on Wednesday denied rumours of the closure of certain banks after the central bank had placed some curbs on the Punjab and Maharashtra Cooperative Bank. “Reports appearing in some sections of social media about RBI closing down certain commercial banks are false,” the RBI said on Twitter.
The RBI had on Tuesday imposed a Rs 1,000 withdrawal cap on customers of the Mumbai-based Punjab and Maharashtra Cooperative Bank for six months, setting off a string of rumours.
“Depositors will be allowed to withdraw a sum not exceeding Rs 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 RBI Directions,” the central bank had said.
Finance Secretary Rajeev Kumar called the rumours of closure of several public sector banks “mischievous”. “No question of closing any PSB [public sector bank] which are articles of faith,” he tweeted. “Rather government is strengthening PSBs with reforms and infusion of capital to better serve its customers.”
The RBI had also prohibited PMC Bank from issuing advances or loans to its customers without its approval. “Without the prior approval in writing from the Reserve Bank, the 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 or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated September 23, 2019,” it added in Tuesday’s announcement.
The RBI said the directions did not mean that the cooperative bank’s licence had been cancelled. However, account holders protested outside the bank’s main branch in Mumbai’s Bhandup area.
Now, follow and debate the day’s most significant stories on Scroll Exchange.