RBI bars PMC Bank from doing business for six months

Mumbai: The Reserve Bank of India (RBI) has barred the Punjab & Maharashtra Cooperative Bank Ltd (PMC), Mumbai from carrying out the majority of its routine business transactions for a period of six months, sparking panic among the depositors and sending shock-waves in the city banking and business circles on Tuesday.

The apex bank’s Chief General Manager Yogesh Dayal said that as per the RBI directions, depositors cannot withdraw more than Rs 1,000 from their savings/current/other deposit accounts. Described as a multi-state cooperative banking entity, the PMC Bank has branches in Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh.

Founded in 1984 in a small room in Mumbai, it has now grown to a network of 137 branches in six states and ranks among the top 10 cooperative banks in the country. The PMC Bank has been barred from granting, renewing and loans and advances, make any investments, incur any liability, including borrowal of funds or accept fresh deposits, etc., without the prior written approval from RBI.

The RBI has also



restricted the bank from disbursing, agreeing to disburse any payment, whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangements and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI notification of Monday. In a statement on Tuesday, the PMC Bank’s Managing Director (MD) Joy Thomas said the bank had been put under regulatory restrictions by the RBI owing to irregularities disclosed to the apex bank.

“As the MD of the Bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months,” Thomas told the banks’ thousands of distressed customers. He said that it was a difficult time for all, but urged the people to cooperate. Thousands of anguished depositors rushed to the PMC Bank’s head office in Bhandup, northeast Mumbai and its branches in different parts of the city to make withdrawals even as police were deployed around the branches to avert any untoward incidents.