RBI hikes withdrawal limit to Rs 40,000 for PMC depositors

About 77% of depositors will now be able to withdraw their entire balance

A Punjab and Maharashtra Co-operative Bank branch in Mumbai | Reuters A Punjab and Maharashtra Co-operative Bank branch in Mumbai | Reuters

In a huge relief for customers of the Punjab and Maharashtra Cooperative (PMC) Bank ahead of Diwali, the Reserve Bank of India on Monday enhanced the withdrawal limit to Rs 40,000.

"The Reserve Bank of India, after reviewing the bank’s liquidity position and its ability to pay its depositors has decided to further enhance the limit for withdrawal to Rs 40,000 , inclusive of ₹ 25,000 allowed earlier," the central bank said in a statement. 

"With the above relaxation, about 77 per cent of the depositors of the bank will be able to withdraw their entire account balance," it said.

The RBI on October 03 had permitted the depositors to withdraw up to Rs 25,000 of the total balance.

It said the financial position of the PMC bank had been substantially impaired due to fraud perpetrated on it by certain persons. "As soon as the matter came to the notice of Reserve Bank of India, action was taken in appointing an Administrator and ensuring that the bank’s available resources are protected and not misused or diverted," the statement said.

Meanwhile, based on a complaint filed by the bank against its officials and borrowers associated with the financial irregularities in the bank and manipulation of its books of accounts, the Economic Offences Wing, Maharashtra Police, has started its investigations into the matter. RBI said forensic auditors have been appointed by the administrator of the bank to look into the related transactions. 

The central bank said it is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the PMC bank.