Panvel-based Bank going the PMC bank way?

Panvel-based Bank going the PMC bank way?

After the PMC Bank, another bank from the same region is under the scanner from RBI. The bank in question is Karnala Nagari Sahakari Bank. It has its headquarters in Panvel.

As per the restrictions placed by RBI, all account holders of the bank will now be able to withdraw only Rs 500 from the bank. These restrictions came into effect from June 15, 2020, and will remain in place for the coming six months.

In addition to this, Karnala bank without the consent of RBI cannot extend any loans or advances, make any investment, incur any liability, including acceptance of fresh deposits. The bank is also prohibited from disbursing any payment or entering into any arrangement to sell, transfer or dispose of any of its properties or assets.

The bank has 17 branches that are spread across Raigad, Pune and Ratnagiri districts. As per the financial statements of the bank that are available on their website, it has deposits to the tunes of Rs 476.3 crores. However, this statement is dated March 31, 2017.

In November 2019, amid the economic slowdown, there was news that Aditya Birla Idea Payments Bank has closed down its Payment Bank operations thereby discontinuing their banking services. The customers, however, may not have to run to withdraw their money as the company has assured the investors that the bank has made full and complete arrangements for the return of deposits.

Just to recap, Mumbai-based Punjab & Maharashtra Cooperative Bank (PMC) has been under regulatory restriction under Section 35A of B R Act by RBI in the second half of last year. This regulatory restrictions were to last for a period of six months due to irregularities disclosed to Reserve Bank of India (RBI). With the operational restriction in place, PMC bank – the urban co-operative bank will not be able to issue fresh loans, accept fresh deposits or borrow funds for the next six months. The account holders of the bank have been protesting against the restrictions for a while now. Initially, the withdrawal cap of Rs 1,000 was imposed which has now been relaxed to Rs 50,000 and in case of a medical emergency, people can withdraw a further Rs 50,000.

There were widespread protests in Mumbai to protest against this move. The promoters of HDIL were arrested in regards to fraud along with the MD and Chairman of the PMC bank.