WATCH | PMC Bank MD K Joy Thomas on restrictions imposed by RBI
A day after the Reserve Bank of India placed Punjab & Maharashtra Cooperative Bank under restrictions, the bank's Managing Director K Joy Thomas clarified that depositors are in no danger of losing their funds.
“We have sufficient liquidity. We are maintaining CRR (cash reserve ratio) and SLR (statutory liquidity ratio) as per RBI guidelines. We are maintaining the required liquidity norms. We have initiated the process of repaying all of our depositors. All our depositors are fully secured,” Thomas told BloombergQuint in an interview.
PMC Bank aims to come out its stressed situation within a few months, Thomas said.
According to RBI's norms, CRR for scheduled urban cooperative banks are required to be kept at 5.5 percent of the net demand and time liabilities. The requirement for SLR is set at 22.5 percent.
The central bank, while placing the restrictions, said that PMC Bank customers cannot withdraw more than Rs 1,000 from their savings, current or any other deposit account for six months. The bank can also not give out any fresh loans, accept fresh deposits or any fresh investments, among other restrictions.
According to Thomas, the banking regulator placed restrictions on PMC Bank because the cooperative bank did not declare certain non-performing assets on its books.
“The restrictions were placed by the RBI because there were certain accounts which should have been classified as NPA but were not. There is an inspection going on into the bank's accounts. We cannot divulge any details yet,” Thomas said.
Real estate developer Housing Development & Infrastructure Ltd., is a borrower to the cooperative bank, he said, adding that HDIL has been a part of the bank's 30-year growth journey.
On Wednesday, Mumbai Mirror reported that PMC Bank's total exposure to HDIL stands at Rs 2,500 crore, which has been classified as a loss account after RBI's insistence.
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