RBI Extends Regulatory Restrictions on PMC Bank by 3 Months

Reserve Bank of India (RBI). 

(Photo: IANS)

The Reserve Bank of India (RBI) on Saturday, 21 March, said it has extended regulatory restrictions on Punjab and Maharashtra Cooperative (PMC) Bank for three more months till 22 June 2020.

The RBI had put a six-month regulatory restriction on the bank on 23 September 2019, after finding out certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL.

"It is hereby notified for the information of the public that the validity of the directive dated 23 September 2019, as modified from time to time, has been extended for a further period of three months from 23 March 2020 to 22 June 2020, subject to review," the RBI said in a release.

It could be noted that unlike in the case of commercial banks, the RBI has no powers to draw up an enforceable scheme of reconstruction of a cooperative bank.

“Nevertheless, in the interest of the depositors and the stability of the cooperative banking sector, the RBI, in consultation with various stakeholders and authorities, is trying to work out a scheme for revival of the bank.”

RBI release

The restrictions on PMC included barring the bank from lending and accepting fresh deposits. The RBI also superseded the board and the management of the bank and appointed an ex-RBI official as the administrator at the bank.