RBI raises PMC Bank withdrawal limit to Rs 1 lakh from Rs 50,000 earlier

With this 84% of the bank's depositors will be able to withdraw their entire money deposited with it

Depositors can withdraw up to Rs 1 lakh from their Punjab and Maharashtra Cooperative (PMC) Bank account, with the Reserve Bank of India (RBI) on Friday enhancing the limit, which was Rs 50,000 earlier. However, other restrictions on the troubled cooperative bank will continue for another six months. With this, 84 per cent of the bank’s depositors would be able to withdraw their entire deposit.

The central bank, in a notification, said it took the decision after a review of the bank’s liquidity position, and in an effort to mitigate the difficulties of the depositors during the prevailing Covid-19 situation. The bank’s resolution process has been affected due to the pandemic. “Further, the extent of the negative net worth of the bank, and the legal processes involved in recovery of bad debts also pose challenges/limitations in the resolution,” the RBI said. 

But consultations are on with various stakeholders and, therefore, the restrictions will continue for a further six months to take the process forward, it said. The RBI had imposed restrictions on the bank on September 23, 2019, after it found that 75 per cent of the loans were fraudulently given to HDIL Group which subsequently went bad.

The RBI had last enhanced the withdrawal limit to Rs 50,000 per depositor on November 5.