The Reserve Bank of India (RBI) has extended restrictions on deposits and withdrawals in the Punjab and Maharashtra Cooperative (PMC) Bank till 30 June 2021. RBI is working to finalize an investor for the scam-hit multi-state cooperative bank.
Key Points
- These restrictions were imposed by RBI on PMC Bank in September 2019 after finding financial irregularities.
- RBI had curbed all activities of PMC Bank and appointed an administrator for the next six months.
- In this step, withdrawals from customers’ accounts were also made limited.
- This set of restrictions were to expire on 31 March 2021. Now, RBI has extended the restrictions till June 30.
- The extension in restrictions has been done due to a delay in finalizing a prospective investor for the bank.
- PMC Bank had received binding offers from certain investors for its reconstruction in response to the Expression of Interest (EoI) dated 3 November 2020.
- At present, RBI and PMC Bank are engaging with prospective investors to secure the best possible terms for the depositors and other stakeholders while ensuring the long-term viability of the reconstructed entity.
- After superseding the bank’s board, RBI had found that around 73% of the bank’s book is exposed to real estate firm Housing Development and Infrastructure Ltd (HDIL).
The bank’s managing director and chief executive officer Joy Thomas have confessed to giving loans to realty developer HDIL and its related entity to the tune of Rs 6,500 crore without informing all the board members. Thomas was later arrested.