Mumbai, Sept 24: Dealing a pre-festival season blow to lakhs of unsuspecting customers, the Reserve Bank of India on Tuesday barred the Punjab & Maharashtra Cooperative (PMC) Bank Ltd from carrying out a majority of its routine business transactions for a six-month period.
The move sent panic waves among the depositors, investors and the city's banking and business circles of the PMC Bank which ranks among the top 10 cooperative banks in the country.
In a terse communique issued late on Monday, RBI Chief General Manager Yogesh Dayal said as per the apex bank's directions, depositors cannot withdraw more than Rs 1,000 from their savings/current/other deposit accounts, leading to huge chaos outside the PMC branches in Mumbai and other parts of India.
Described as a multi-state cooperative banking entity founded in 1984 from a small room in Mumbai, the PMC Bank has grown to 137 branches - in Maharashtra (103), Delhi (6), Karnataka (15), Goa (6), Gujarat (5), and Madhya Pradesh (2).
As per the RBI sanctions, the PMC Bank is debarred for six months from granting, renewing any loans and advances, make any investments, incur any liability, including borrowal of funds or accept fresh deposits, etc, without the prior written approval from RBI.
The RBI has also restricted it from disbursing, agreeing to disburse any payment, whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangements and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI notification of Monday.
Hoping to assuage the customers' sentiments, PMC Bank's Managing Director (MD) 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," Thomas told the bank's distressed customers.
He said that it was a difficult time for all, but urged the people to cooperate, even as the police were deployed outside many branches in the city to avert any untoward incidents.
As per the PMC Bank's latest Annual Report, it has deposits of over Rs 11,617 crore and loans/outstandings of Rs 8,383 crore.
Confusion reigned supreme outside many of the PMC Bank branches in Mumbai, Thane and other cities as depositors - mostly MSMEs and ordinary families - made a beeline to get their monies back, but were not allowed.
"We are completely ruined. We have no money at home for even basic needs. They should allow us to withdraw more or close down our accounts," a weeping woman customer told mediapersons outside the branch in Bhandup.
Another customer in Borivali said the RBI should penalize the bank management for any irregularities instead of blocking customers' accounts.
"This Rs 1,000 limit is ridiculous. We have to make purchases for Navratri, Diwali, pay our children's educational fees and other household expenses. How can we manage ?" the fuming man asked.
Former BJP MP Kirit Somaiya said he was informed of the regulatory orders against the PMC Bank and has raised the issue with the RBI and the Ministry of Finance in the interests of the customers.
"@PMC_Bank says they are under 35A of BR by the @RBI and the thing is I have all my savings stuck in that bank and they say I cannot withdraw my money now.. What do I do.. People here have all their savings in the bank and the bank says they can't help," customer Avinash Sharma tweeted.
Another customer Praful Shah tweeted: "#PMCBank. Its nothing but bankruptcy. My 25 lakhs, saved for daughters' marriages, are now trapped. My lifetime saving getting washed out overnite. Feeling sad."
Comments
According to news reports , RBI announced on 24 September , 2019 restrictions on the Punjab & Maharashtra Cooperative ( PMC ) Bank from carrying out a majority of its routine transactions for a period of six months. Obviously , the RBI move while being well intentioned , has put customers in a very tight position, disabling them from carrying on their life as usual for no fault on their part as they may not be able to withdraw more than rupees one thousand during the restriction period. In this context , it may be apt to refer readers to this Vedic astrology writer’s predictive alert through article - “ World trends in April to August 2019” - brought to public domain widely in March and subsequently on 5 April 2019. The predictive alert had said that during a period of four and a half months from mid-April to August 2019 , among other countries specified in the article , more care and appropriate strategy may be called for in India also in relation to the following :-
“ 1. Economic and financial aspects may reflect major worrisome concerns.”
A review of the predictive alerts carried out by this writer in May 2019 had suggested that such need for more care and appropriate strategy may reach out to mid-October , while the period from about 7 August to 9 October could be particular. And within that period , 25 September to 9 October in 2019 looked to be more particular. It seems that announcement of RBI on 24 September 2019 can be counted as meaningfulness of the predictive alert.
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