Withdrawal Limit Raised To Rs 50,000 For Crisis-Hit PMC Bank Customers

The Reserve Bank of India (RBI) raised withdrawal limit for account holders of crisis-hit Punjab and Maharashtra Co-Operative Bank or PMC Bank to Rs 50,000 from earlier withdrawal limit of Rs 40,000, Reserve Bank of India said in a press release on Tuesday. "The Reserve Bank of India, after reviewing the bank's liquidity position and its ability to pay its depositors has decided to further enhance the limit for withdrawal to Rs 50,000, inclusive of Rs 40,000 allowed earlier," the central bank said.

"With the above relaxation, more than 78 per cent of the depositors of the bank will be able to withdraw their entire account balance," the RBI added.

The Reserve Bank of India has also allowed PMC Bank account holders to withdraw money from the bank's own ATMs within the prescribed limit of Rs 50,000. "This is expected to ease the process of withdrawals," RBI said.

This is the fourth time the regulator has increased the withdrawal limits since it clamped down on the bank on September 23 and capped withdrawal limit at Rs 1,000 per customer for six months.

Last month, the Reserve Bank of India raised the withdrawal limit for PMC Bank depositors to Rs 40,000.

RBI had imposed restrictions on PMC Bank in September 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 bank, over a long period of time, had given over Rs 6,500 crore in loans to HDIL, which is 73 per cent of its total advances, and which has turned sour with a shift in the fortunes of the now bankrupt company.

Its total loans stand at Rs 8,880 crore and the deposits at over Rs 11,610 crore. There have been massive protests across city from the depositors following the RBI action. 

HDIL promoters Rakesh Wadhawan and his son Sarang, were arrested last month in connection with the PMC Bank scam and were remanded to the judicial custody.