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On November 5, RBI has extended the deposit withdrawal limit for all the PMC bank depositors to ₹50,000. It’s inclusive of the limit ₹40,000 which was relaxed earlier. This outrageous step of the Reserve Bank of India will enable 78% of the Punjab and Maharashtra Cooperative bank’s depositors to withdraw their entire account balance.
Highlights of the Story
To safeguard the interest of PMC bank depositors, RBI has increased the deposit limit. It all started back on September23. Have a glimpse of the entire story:
- The Punjab and & Maharashtra Cooperative Bank (PMC) has come upon a regulatory radar after the Housing Development & Infrastructure Ltd. Its company’s directors failed to repay a massive amount ₹4355 crore loan from PMC Bank.
- Considering the liquidity crisis, the PMC bank prompts RBI to appoint an administrator. The bank wants RBI to look after the matter and oversee business under restrictions.
- RBI took over administration of PMC banks on September 23. It curbs them from executing any operations for the next six months over alleged financial irregularities. Thereby, it restricts the bank from performing basic functions such as lending and deposit withdrawals.
- This action of RBI shook all the branches of PMC payments networks and resulted in shutting of its ATMs for about two months.
- Not only the banks but the customers were also taken aback by the RBI’s decision. The BPMC bank customers were left queuing up at the regional bank branches to access their accounts. Besides, online banking services remain inaccessible.
- The Reserve Bank of India has inflated the PMC bank depositor’s withdrawal limit four times in a row.
- The initial withdrawal limit that was set by RBI is ₹1000 per customer which was relaxed to ₹10,000 within two days. Further, it gets increased to ₹25,000 and later to ₹40,000.
- Moreover, RBI has permitted the depositors to withdraw cash from the PMC bank’s ATMs within the relaxed limit of Rs 50,000.
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Nirmala Sitharaman Viewpoint on the hike to PMC Bank Depositors
On Monday in Lok Sabha, the Finance Minister, Nirmala Sitharaman proclaim that nearly 78% depositors of the scam-hit PMC bank get permitted to withdraw their entire deposits even through the ceiling of ₹50,000 on withdrawal persist.
Further, Nirmala adds that in case of a medical emergency, marriage or other financial crises a PMC bank depositor can withdraw up to ₹1 lakh through invoking “hardship provisions” of the Reserve Bank of India.