PMC bank scam: One year since the sanctions; Here's what happened

The Punjab and Maharashtra Co-operative Bank which was entwined in a huge scam involving collusion between the bank’s top officials and the Housing Development and Infrastructure Ltd. (HDIL) was taken over by the Reserve Bank of India exactly a year back.

After the RBI had taken over it was revealed that the bank had massively violated the RBI norms of exposure. Ever since the PMC crisis, over nine lakh depositors, mostly people who are senior citizens have been unable to fend for themselves. Moreover, at least 50 people have died due to anxiety and stress-related issues.  

Interestingly, in order to mark the anniversary of the moratorium imposed by RBI on September 23, a Maha morcha is being organized in front of the RBI office at Fort (Asiatic Library). In order to refresh the memories of the past year, let us look at some of the sanctions that have happened in the recent past.

• Present withdrawal limit stands at 1 lakh per account. This is an increase from 1k for the first 6 months after the scam, to 10k to 25k to 50k to finally 1 lakh.
• Moreover, on grounds of hardship, which includes the pandemic and other critical illnesses, withdrawals can be permitted till 5L.
• Insurance cover of 5L for account holders (provided by DICGC, a wholly-owned subsidiary of RBI) not yet applicable as the license of the bank has not been cancelled yet.
• The RBI has also stated that the purpose of imposing restrictions on the PMC bank was to avoid damages to depositors, prevent alienation of its assets further providing an opportunity to rectify the irregularities, improve its financial position and prevent preferential payments.

It is important to note that scams such as this give birth to insecurities amongst the citizens, especially the ones who have little, to begin with. These scams give birth to people who lose faith in financial institutions. However, at this point, one can only hope that all the depositors get their deposits back soon.