The Reserve Bank of India has placed Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) under directions for six months from the close of business of the bank on September 23, 2019.
The depositors will be allowed to withdraw a sum not exceeding ₹1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directions.
Without the prior approval in writing from the Reserve Bank, the Urban Co-operative Bank will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated September 23, 2019.
The central bank, in a statement, said, the issue of the directions should not, per se, be construed as a cancellation of a banking licence by the Reserve Bank. The bank will continue to undertake banking business with restrictions until further notice/instructions. The Reserve Bank may consider modifications of these directions depending upon circumstances.
The RBI said the directions are imposed in exercise of powers vested in it under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the said Act.
As at March-end 2019, PMC Bank had deposits and advances aggregating ₹11,617 crore and ₹8,383 crore, respectively.
The Bank is a multi-state scheduled urban co-operative bank with its area of operation in the States of Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. It has 137 branches.