PMC Bank: Now account holders can’t withdraw more than ₹1000, as per RBI restrictions

Punjab & Maharashtra Co-op Bank has been directed by the RBI to curb withdrawal for six months as a result, many account holders stand perplexed as they will now be able to withdraw only ₹1000 for the next six months. This comes as a shocker to them, as they received little or no intimation about this and they are suddenly faced with a serious cash crunch and have no idea how to manage the day to day expenses.

Under Section 35A of the Banking Regulations Act, 1949, RBI, at any point, has the power to direct banks to do so:

(1) Where the Reserve Bank is satisfied that—

(a) (it is) in the 178 [public interest]; or

179 [(aa) in the interest of banking policy; or]

(b) to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or

(c) to secure the proper management of any banking company gener­ally.

The bank has been given directions not to
a) Grant or renew any new loans or advances
b) make any investment
c) incur any liability
d) Disburse any payments
e) enter any compromise
f) transfer or expose any assets.

A Twitter user, lamenting, this instruction said, “You encouraged us to go digital and we deposited our life savings in these banks and now the Punjab and Maharashtra bank is shut, Where should we go now? Please help us in getting our money back.”

Twitter users expressed their concerns over these restrictions: