RBI raises withdrawal limit for PMC bank customers to Rs 10,000

Mumbai: The Reserve Bank of India (RBI) on Thursday increased the withdrawal limit for Mumbai-based Punjab and Maharashtra Co-Operative Bank (PMC Bank) account holders. In a statement, the central bank said PMC Bank customers can now withdraw Rs 10,000 from their account, instead of Rs 1,000.

The development came after protests from PMC Bank customers in past two days following the RBI's move to allow the co-operative bank's customers to withdraw only a sum of Rs 1,000 from their accounts over the next six months.

"The relaxation has been granted with a view to reducing the hardship of depositors. The RBI is closely monitoring the position and will continue to take further steps as are necessary to safeguard the interest of depositors," it said in a statement.

"Other terms and conditions of the directive will remain unchanged. With the above relaxation, more than 60 per cent of the bank depositors will be able to withdraw their entire account balance," it said in a statement.

On Monday, the central bank had restricted activities of PMC Bank for six months. It capped the withdrawals at Rs 1,000 per account and asked the bank to not grant or renew any loans and advances, make any investment or incur any liability, including borrowable of funds and acceptance of fresh deposits.

The crackdown caused panic among depositors. However, the RBI said the directions were necessitated on account of major financial irregularities, failure of internal control and systems of the bank and wrong or under-reporting of its exposures under various off-site surveillance reports.

PMC Bank is a multi-state scheduled urban cooperative bank with operations in Maharashtra, New Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. With a network of 137 branches, it ranks among the top 10 cooperative banks in the country.