RBI imposes restrictions on PMC Bank; withdrawal restricted to Rs 1,000 per account

Mumbai: The Reserve Bank on Tuesday imposed operational restrictions on Punjab and Maharashtra Co-operative Bank (PMC Bank), resulting in chaos outside its branches in the financial capital.

As per the RBI directions to PMC Bank, withdrawals have been capped at Rs 1,000 per account and the bank is not allowed to make any fresh loans. The RBI monitors banks' health and issues such directions in case of concerns over financial health of an institution. However, no reasons were specified by the central bank for its restrictions on PMC Bank.

"The issue of the directions by the Reserve Bank should not, per se, be construed as cancellation of its banking licence. The bank will continue to undertake banking business with restrictions till further notice/instructions," the RBI said in a notification.

The restrictions will be in force for six months, the RBI said. According to PMC Bank's website, the lender was awarded the scheduled status in 2000 and has a presence in multiple states.