In pics: Thousands of customers of a small bank in India panic after the regulator cracks the whip

Sriram IyerSep 24, 2019, 19:29 IST

The Reserve Bank of India put withdrawal restrictions on customers of Punjab & Maharashtra Cooperative (PMC) Bank.
Depositors cannot withdraw more than ₹1,000 from their savings/current/other deposit accounts.
The sanctions from the central bank ahead of the festive season has led to panic and protests in many parts of the country.
The business as usual has been restricted due to under-reporting of bad loans, according to reports.

Thousands of customers of Punjab & Maharashtra Cooperative Bank (PMC) woke up to a terse notification from the Reserve Bank of India. Depositors cannot withdraw more than ₹1,000 from their savings/current/other deposit accounts.

The bolt from the blue, ahead of the festive season, led to panic protests in many parts of the country.

Customers gather inside the Punjab and Maharashtra Cooperative Bank, at Kolshet in Thane. The Reserve Bank of India has placed Mumbai-based PMC Bank under directions for six months from the close of business of the bank on September 23, 2019.Photo)(

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.

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).

Bank employees paste a copy of closure notice issued by the RBI on a wall of Punjab and Maharashtra Cooperative Bank building, at Fort in Mumbai. The Reserve Bank of India has placed Mumbai-based PMC Bank under directions for six months from the close of business of the bank on September 23, 2019.Photo/Mitesh Bhuvad)(

The RBI has also restricted PMC, which ranks among the top 10 cooperative banks in the country, from disbursing, agreeing to disburse any payment-- even if it is to discharge its liabilities. Neither can the bank 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.

The decision by the banking regulator was triggered by the under-reporting of loans by PMC, according to sources cited by the LiveMint.

Customers show a message received on their phones about the closure of Punjab and Maharashtra Cooperative Bank, at Kolshet in Thane. The Reserve Bank of India has placed Mumbai-based PMC Bank under directions for six months from the close of business of the bank on September 23, 2019.Photo)(

"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.

A man talks on his phone outside outside the Punjab and Maharashtra Cooperative Bank at GTB Nagar in Mumbai. The Reserve Bank of India has placed Mumbai-based PMC Bank under directions for six months from the close of business of the bank on September 23, 2019.Photo/Shashank Parade) (

"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," Joy Thomas , Managing Director, PMC said the bank had been put under regulatory restrictions by the RBI owing to irregularities disclosed to the apex bank.

As per the PMC Bank's latest Annual Report, it has deposits of over ₹11,617 crore and loans/outstandings of ₹8,383 crore.

With inputs from IANS

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In pics: Thousands of customers of a small bank in India panic after the regulator cracks the whip