PMC Bank withdrawal limit hiked to Rs 50,000

After a fresh review of the scam-hit Punjab and Maharashtra Cooperative (PMC) Bank’s liquidity position, the Reserve Bank of India (RBI) on Tuesday raised the withdrawal limit for bank depositors to Rs 50,000 from Rs 40,000 earlier.

This is the fourth time the central bank has increased the withdrawal limit after imposing the regulatory restrictions on September 23 under the provisions of the Banking Regulation Act.

With this relaxation, the RBI said, more than 78 percent of PMC Bank depositors of the bank will be able to withdraw their entire account balance.

The RBI had initially allowed depositors to withdraw a paltry Rs 1,000, followed by Rs 25,000 to Rs 40,000 and to Rs 50,000 on Tuesday but the customers have been demanding full access to all their accounts.

“The RBI, after reviewing the PMC 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,” an RBI statement said.

The RBI further said that it has decided to allow the depositors to withdraw within the prescribed limit of Rs 50,000 from the bank’s own ATMs, thus enabling more than 78 percent of the depositors of the bank to withdraw their entire account balance.

“The Reserve Bank is closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank,” it added.

At least seven PMC Bank depositors have died after the alleged Rs 4,355 crore scam came to light and the RBI imposed restrictions on withdrawal of funds. The restrictions came after RBI found certain irregularities in the bank, including under-reporting of NPAs.

The bank officials had allegedly colluded with promoters of HDIL and illegally routed funds to the now-bankrupt firm, which accounted for 73 percent of PMC’s loan book.