Reserve Bank of India (RBI) increased the withdrawal limit for depositors of Punjab and Maharashtra Cooperative (PMC) Bank on Thursday to Rs 25,000 from Rs 10,000 earlier.
On Thursday again, the central bank decided to appoint a three-member committee to assist the bank administrator.
According to RBI, the increase in the limit will enable 70% of the bank’s depositors to withdraw their entire account balance. RBI had placed lending restrictions on the troubled cooperative bank on September 23, restricting withdrawal to Rs 1,000. This limit was increased to Rs 10,000 three days later.
RBI said the decision has been taken after reviewing the bank’s liquidity position and to reduce the hardships faced by depositors.
It reassured depositors that the position continued to be under review and RBI will continue to take necessary steps in the interest of depositors.
A quick resolution will also depend on the fraud-struck bank’s ability to recover funds from its biggest borrower—HDIL group.
Both the bank’s management and the RBI-appointed administrator J B Bhoria said the bank had enough securities against loans.
The administrator has been appointed to operate the bank after the central bank superseded the board using its powers under Section 35 of the Banking Regulation Act.
Bankers said deposits of up to Rs 1 lakh are insured but customers will have to wait until resolution of the case.
Given the size of the bank and the number of institutional accounts, RBI is expected to come out with a resolution quickly to ensure the problems do not pass on to other institutions.
The bank has deposits of 216 urban cooperative banks, 1,754 cooperative credit societies, and 15,000 cooperative housing societies and other institutions. These include deposits totalling Rs 100 crore of the RBI officers cooperative credit society.
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