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.

October 1, 2022
Monthly Snapshot – September 2022
Click here to download the report The US market is witnessing the sharpest reversal in its real-estate sector after...
September 20, 2022
Conflict Theory
Why are we Constantly Competing?  “A house may be large or small; as long as the neighboring houses are...
September 6, 2022
Cosmo First Limited
Key Highlights Rebranded to Cosmo First Limited Foraying into the D2C Petcare industry with the launch of ZIGLY, a...
September 2, 2022
Monthly Snapshot – August 2022
Click here to download the report China has undertaken a slew of economic measures and policies to revive its...
July 31, 2022
Monthly Snapshot – July 2022
Download the report The GST Council recently reviewed tax rates and assumptions for certain items to promote growth in...
July 5, 2022
Monthly Snapshot – June 2022
Click here to download the report WTO recently made special announcements- the end of fishing subsidies to illegal fisheries...
June 29, 2022
Kansai Nerolac Paints Limited
Click here to download the report Key Highlights Nerolac introduced Neropoxy Solvent Free coating for water pipelines and C5...
June 3, 2022
Monthly Snapshot – May 2022
Click here to download the report When it comes to instant noodles which is the first brand that comes...
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...