The Reserve Bank of India (RBI) provided some relief to account holders of Punjab and Maharashtra Cooperative Bank (PMC Bank) by increasing the withdrawal limit from Rs 1,000 to Rs 10,000 for the next six months.
The change in restriction limit will enable more than 60 percent of the regional bank's depositors to withdraw their entire account balance, the RBI said. The Central Bank further said that the relaxation was granted to reduce the hardship of the depositors of PMC Bank.
Starting 23 September, the RBI imposed operational restrictions on the PMC Bank, wherein withdrawals were capped at Rs 1,000 per account and the bank is presently not allowed to issue any fresh loans. The restrictions will be in force for six months.
RBI said that the "Directions were necessitated on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various Off-site Surveillance reports to RBI that came to the Reserve Bank's notice recently."
In its press release on Thursday, it said that other than the revision in withdrawal limits on depositors, other restrictions imposed on PMC Bank shall remain unchanged. It also said that it is "closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank."
In an earlier release, RBI clarified that its directions should not, per se, be construed as a cancellation of PMC Bank's banking licence.