Surging Defaults and Capped Withdrawals

The total deposits of the Punjab and Maharashtra Co-operative (PMC) Bank stand at around Rs. 110 billion and the total loan book is around Rs. 83 billion, making it among the top 10 co-operative banks of India.

“PMC Bank has been put under regulatory restriction under Section 35A of the Banking Regulation Act for a period of six months due to irregularities disclosed to RBI,” the bank’s then MD, Mr. Joy Thomas, said in a message to depositors.

This comes from the surge in defaults over the past six months, amid tight economic conditions. This has made it difficult for the bank to meet its commitments.

To bring the depositors out of this muddle, RBI has increased the withdrawal limit from Rs. 1,000 to Rs. 10,000.  “Other terms & conditions of the said Directive shall remain unchanged. With the above relaxation, more than 60% of the depositors of the Bank will be able to withdraw their entire account balance,” RBI said in a statement.

The extent to which this multistate co-operative bank’s downfall will contribute to the impending crisis would be dreadful to watch.

Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on twitter
Twitter
Share on facebook
Facebook
Share on email
Email
May 12, 2022
Campus Activewear Limited
Click here to download the report Campus Activewear: Athleisure Super-Giant in the making? Overview Campus Active Ltd. (NSE: CAMPUS)...
April 30, 2022
Monthly Snapshot – April 2022
Click here to download the report When we think or hear of e-commerce websites, the first few names that...
April 2, 2022
Monthly Snapshot – March 2022
Click here to download the report The fact is that life is all about risks. You will never achieve...
March 2, 2022
Monthly Snapshot – February 2022
Click here to download the report The motive behind Russia’s invasion of Ukraine remains a mystery as of now....
February 1, 2022
Monthly Snapshot – January 2022
Click here to download the report As you wait for the Union Budget to be unveiled at 4 p.m.,...
January 11, 2022
The Paradigm Shift in Personal Finance post Pandemic
Introduction to Personal Finance Personal finance is the management of your money through saving and investing. It is concerned...
January 2, 2022
Monthly Snapshot – December 2021
Click here to download the report 2021 was undeniably the best year for Indian startups and the equity market,...
December 25, 2021
Aviation Sector
Industry Insights: The aviation industry has contributed significantly to global economic growth. The global aviation industry is expected to...
December 2, 2021
Monthly Snapshot – November 2021
Click here to download the report After months of farmer protests, Prime Minister Sri Narendra Modi has scrapped the...
December 1, 2021
Scope of REIT
A real estate investment trust (“REIT”) owns, operates, and finances income-generating real estate properties. REITs offer a pleasing investment...