PMC Bank account holders? RBI increases withdrawal limit to Rs 10,000

Mumbai, Sep 26: The RBI on Thursday increased withdrawal limit from the initial Rs 1,000 to Rs 10,000 per account for Punjab and Maharashtra Cooperative Bank (PMC Bank) account holders. Joy Thomas, Managing Director of PMC Bank has also been suspended.

Earlier, the RBI had put restrictions on PMC Bank. Cash withdrawals were capped at ₹1,000 per account, spreading panic among depositors. PMC Bank had also been barred from making fresh loans and taking deposits.

The restrictions, were imposed under Section 35A of the Banking Regulation Act, which is aimed at preventing a run on the bank that could end up endangering the stability of the entire financial system because of a contagion effect.

PMC bank is one of the 62 banks registered under Multi-State Co-operative Societies Act, 2002. It comes under the purview of Central Registrar due to involvement of more than one state. The multi-state cooperative bank has 137 branches, mostly located in Mumbai. There are 1,814 employees as in March.

Earlier in the day, distraught customers of PMC bank filed a joint police complaint against the bank's chairman and directors for alleged misappropriation of funds of the depositors. The customers stated that at least 14 people were involved in the alleged misappropriation of funds. They also sought an explanation from the management.

Meanwhile, social media users have also taken to Twitter to voice their concerns and ask why the depositors should pay for the bank's actions.