The Reserve Bank of India has extended the restrictions on conducting business on fraud hit Punjab and Maharashtra Co-operative Bank (PMC Bank) by three months till June 22.
The Mumbai-based urban cooperative bank was placed under moratorium from close of business on September 23, 2019 to protect depositor's interest.
RBI is trying to work out a scheme for revival of the bank in the interest of the depositors and the stability of the cooperative banking sector.
In order to take this forward, it is considered necessary to extend the aforesaid moratorium, RBI said in a statement today.
The Reserve Bank has also been, directly and through the Administrator, having discussions with various authorities on the expeditious sale of securities and recovery of loans.
The tangible outcome of these measures is taking some time due to various factors including legal processes.
Unlike in the case of commercial banks, the Reserve Bank has no powers to draw up an enforceable scheme of reconstruction of a cooperative bank.
RBI has modified its directions from time to time, the last being on November 5, 2019, as a result of which 78 per cent of PMC Bank depositors were able to withdraw all their account balances.
PMC Bank has been facing regulatory actions and investigation over alleged irregularities in certain loan accounts. Loans given to financially stressed real estate player Housing Development & Infrastructure (HDIL) are at the centre of the investigation.
Banking regulator been closely monitoring the situation and has been holding regular meetings with the Administrator and the Advisory Committee of the bank.