Thousands of PMC Bank Depositors Panic as RBI Limits Withdrawals to Rs 1,000 in 6 Mths

New Delhi: In a move that created panic among thousands of depositors of Punjab & Maharashtra Cooperative Bank (PMC Bank), the Reserve Bank of India (RBI) on Tuesday imposed restrictions on cash withdrawals, limiting it to Rs,1000 once in six months.

The restrictions will be in place for six months from the close of banking hours on September 23, as per media reports, which said the RBI’s move was prompted by complaints of irregularities.

The PMC Bank, among the top 10 cooperative banks in India, has 137 branches spread across seven states -- Maharashtra, Gujarat, Delhi, Andhra Pradesh, Madhya Pradesh, Karnataka and Goa. It has 81 branches in Mumbai, Navi Mumbai, Thane and Palghar regions, 10 branches in Pune and 12 branches in rest of the state. The bank has 51,601 members. The bank reported total advances of Rs 8,383.33 crore as on March 31, 2019, according to an Indian Express report.

Taken aback by the sudden decision by the apex bank, people thronged bank branches across Maharashtra, worried about their household expenses and blaming the government to not keep cash at home and then pulling the rugs from below their feet. Some took to the social media to express their shock.

One Amrita Lokhande tweeted: “And what should the account holder do on receiving this http://message. Rs  1k is all that we can withdraw over 6 months. We stopped keeping cash at home because you encouraged online transaction and now we can't even withdraw our own hard earned money. @nsitharaman #pmcbank”

Another depositor, Praful Shah, a 'Modi Bhakt' tweeted: “Its nothing but bankruptcy. My 25 lakhs, saved for daughters' marriages, are now trapped. My lifetime saving getting washed out overnite. Feeling sad.”

According to a report in the Indian Express, the RBI in its directions to one of the top cooperative banks in Maharashtra, with a with a deposit base of Rs 11,617 crore, that the 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 without prior approval in writing from the Reserve Bank.”

Even though the RBI clarified that the bank licence had not been cancelled, chaos reigned across bank branches in Maharashtra, with depositors blaming the bank for keeping them in the dark. Some said they had no money with them and that the Rs 1,000 limit was ‘laughable’ in these times, with prices of essentials skyrocketing.

Karan Thakkar, another depositor, vented his anguish at the RBI and tweeted: “Dear @RBI sitting in AC room you cant understand problems of people having lacks (sic) of rupees in pmc bank you need to give chance for withdrawing money our life is dependent on bank and suddenly you restrict bank. Please help us give us some time. Thankyou.”

PMC Bank, founded in 1984 by Gurcharan Singh Kochhar, has a 14-member board headed by one S Waryam Singh.

In a statement on Tuesday, PMC Bank's Managing Director, 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," he told thousands of distressed customers, according to a report in IANS.