The Reserve Bank of India (RBI) on Thursday increased the withdrawal limit for Mumbai-based Punjab and Maharashtra Co-Operative Bank (PMC Bank) account holders. In a statement, the central bank said PMC Bank customers can now withdraw Rs 10,000 from their account, instead of Rs 1,000. The development comes after protests from PMC Bank customers in past two days following the RBI's move to allow the co-operative bank's customers to withdraw only a sum of Rs 1,000 from their accounts over the next six months.
More than 60 per cent of PMC Bank depositors will be able to withdraw their entire account balance, the RBI said in its statement. The relaxation has been granted with a view to "reducing the hardship of the depositors", the central bank said.
The RBI also said it 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".
The RBI had on Tuesday imposed restrictions on PMC Bank citing "major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various Off-site Surveillance reports". Putting the co-operative bank under its lens, the RBI barred PMC Bank from renewing or granting any loans, or making investments without its prior approval.
The sudden move led to protests and long queues outside PMC Bank branches. Punjab and Maharashtra Co-Operative Bank has 137 branches spread across seven states in the country.
India has more than 1,500 small urban co-operative banks that typically service small local communities in certain districts or states.
Over two dozen of these co-operative banks are now under the RBI's administration, but PMC Bank - with deposits of Rs. 11,617 crore as of March 31 - is by far the largest to be hit by such measures.
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