On Tuesday, the Reserve Bank of India barred Mumbai-based Punjab & Maharashtra Cooperative Bank (PMC Bank) from carrying out any sort of business transactions and has put limits on the amount that can be withdrawn by customers from the urban co-operative bank.
The RBI has put PMC Bank under Directions for six months from the close of business of the bank on Sept 23, 2019. Due to this, the bank account holders are not entitled to withdraw more than ₹1,000 from their accounts. The restriction has been levelled on the savings & current accounts or any deposit accounts, subject to conditions stipulated in the RBI Directions.
From today, the PMC bank has to follow the RBI regulations for its banking business.
The RBI said the directions are imposed on PMC Bank in the 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. However, RBI didn't cancel the licence of PMC Bank.
Without prior approval in writing from RBI, the PMC bank will not be able to grant any loans & advances, incur any liability including borrowal of funds & acceptance of fresh deposits.
The Urban co-operative bank has been barred from making any investment, disburse or agree to disburse any payment whether in discharge of its liabilities & obligations or otherwise, enter into any compromise or arrangement & sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI directions dated Sept 23, 2019.
PMC Bank had deposits and advances aggregating ₹11,617 crores & ₹8,383 crores--as at March-April 2019, respectively.
The PMC Bank is a multi-state scheduled urban co-operative bank with its area of operation in Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh & Madhya Pradesh. It has 137 branches.
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