The Reserve Bank of India on Tuesday increased the withdrawal limit for account holders of Punjab and Maharashtra Co-operative Bank from Rs 40,000 to Rs 50,000. The central bank said the relaxation will allow more than 78% of the customers of PMC Bank to withdraw their entire account balance.
“The 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 50,000, inclusive of Rs 40,000 allowed earlier,” the central bank said in a press release.
“It has also been decided to allow the depositors to withdraw from the bank’s own ATMs within the prescribed limit of Rs 50,000,” it added. “This is expected to ease the process of withdrawals.”
The RBI said it was “closely monitoring” the position of the bank, and would continue to take measures in the interest of depositors.
PMC bank scam
On Monday, the Bombay High Court directed the RBI to file an affidavit disclosing what steps it had taken to protect the interests of depositors of the bank. The court was hearing petitions in connection with the fraud at the multi-state cooperative bank and the restrictions imposed by the RBI on withdrawals from the bank.
In September, the RBI imposed curbs on the bank, saying that depositors would not be allowed to withdraw more than Rs 1,000 from the bank for six months. The withdrawal limit was raised to Rs 25,000, and then to Rs 40,000 last month.
The Enforcement Directorate is investigating allegations that the bank did not report all non-performing assets, or bad loans, after providing funds to several companies. The scam is said to be worth Rs 4,355 crore.
The police have arrested Housing Development Infrastructure Limited’s promoter Rakesh Wadhawan and his son Sarang Wadhawan, PMC Bank’s former Chairperson Waryam Singh, and its Managing Director Joy Thomas in connection with the case. The Wadhawans allegedly created more than 21,000 fictitious accounts to hide loans from PMC Bank. They continued to default on the loans that the bank allegedly did not mention in its annual report.
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