Customers of Punjab and Maharashtra Cooperative Bank can now withdraw Rs 10,000 from their savings or other deposit accounts in the next six months.
Customers of Punjab and Maharashtra Cooperative Bank can now withdraw Rs 10,000 from their savings or other deposit accounts in the next six months. RBI has increased the withdrawal limit from Rs 1,000, says RBI. The RBI has also suspended the Board of the bank on account of major financial irregularities, failure of internal control and systems of the bank and wrong reporting of its exposures under various Off-site surveillance reports to RBI. The relaxation is poised to help over 60 per cent of the depositors of the bank to withdraw their entire account balance.
“The above relaxation has been granted with a view to reducing the hardship of the depositors. 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,” RBI said in a statement.
To secure the proper management of the bank, the RBI had imposed directions under article 35A of the banking regulations. The RBI directions also restricted the bank to grant or renew any loans and advances for another six months, without prior approval in writing from the central bank. The PMC bank is also restricted to make any investment or to incur any liability including borrowal of funds and acceptance of fresh deposits. Managing Director of PMC Bank, Joy Thomas earlier said that the RBI has taken this action due to an increase in the bank’s NPA and he accepted that the bank was not fulfilling a few RBI norms, against which the central bank took steps.
The non-performing assets of the banks have been consistently increasing since the FY16. In FY16, and FY17, the net NPA per cent of the banks was up to 0.96 per cent, which rose to 2.19 per cent in FY19. Higher NPA has led to an increase in the provisioning amount, which doubled on-year from Rs 42 crores in FY18, to Rs 88 crores in FY19, according to the bank’s annual report. However, the bank has made a net profit of around Rs 100 crores in the last two financial years and has been in profit for at least the last four years.