The Reserve Bank of India (RBI) has revised the withdrawal limit for account holders of the stressed Punjab and Maharashtra (PMC) Bank. Now the account holders can withdraw up to Rs. 25,000. Earlier the withdrawal limit set by the regulator was Rs. 10,000. In a statement, it said, "The Reserve Bank of India again reviewed the bank's liquidity position and, with a view to reducing the hardship of the depositors, has decided to further enhance the limit for withdrawal to Rs. 25,000”.
The statement also mentions that with this new withdrawal limit, more than 70 per cent of account holders of the bank will be able to withdraw their entire account balance. What is interesting to note is that when RBI had increased the withdrawal limit from Rs 1,000 to Rs 10,000 many users had complained that the ATMs did not have sufficient funds and they had to return home empty handed. Hopefully, history will not repeat itself now.
The crisis in PMC bank was first exposed on September 23, when RBI directed it to shut down its operations and also imposed a withdrawal limit of ₹1000 per customer. It is being said that the major cause of this crisis is the exposure that the bank had to bankrupt Housing Development and Infrastructure Limited (HDIL). The total exposure to the sick real estate company is being pegged over Rs 6,500 crore, which translates to 73 per cent of its total assets.
Earlier in the day, HDIL promoters Rakesh Wadhawan and Sarang Wadhawan have been arrested by Mumbai police. Their property which is being pegged at worth Rs 5000 crore has also been frozen. They will be produced in front of the court on Friday (October 4).
On September 20 a plea has been filed in Bombay High Court challenging the restrictions imposed by the Reserve Bank of India on the bank. The public interest litigation (PIL) was filed by an NGO Consumer Action Network and eight persons, who claimed to be depositors and account holders in the PMC Bank.
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