The Reserve Bank of India on Friday raised the withdrawal limit for the depositors of crisis-hit Punjab and Maharashtra Cooperative (PMC) Bank to Rs 1 lakh from Rs 50,000. While the RBI has also extended regulatory restrictions for 6 months that is from June 23 to December 22, 2020. The decision was taken by the RBI as the resolution process of the lender has been affected by the COVID 19-induced lockdown.
A press release issued by RBI on Friday said, “Further, on a review of the bank’s liquidity position, its ability to pay the depositors and with a view to mitigating the difficulties of the depositors during the prevailing COVID-19 situation, it has also been decided to further enhance the limit for withdrawal to Rs 1,00,000 (Rupees One Lakh only) per depositor, inclusive of Rs 50,000 allowed earlier.”
With a new withdrawal limit fixed by the RBI for PMC Bank depositor, around 84 per cent of the depositors will now be able to withdraw their entire account balance.
The RBI had put a six-month regulatory restriction on the bank on September 23, 2019, after finding out certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL. Earlier in March, RBI had extended the restrictions for 3 months that was scheduled to end on June 22.
The restriction on PMC included barring the bank from lending and accepting fresh deposits.