While the bank has stopped all transactions, they are allowing customers to take out their belongings from the locker in lots
The bank’s managing director Joy Thomas said the lender has been put under restriction due to irregularities disclosed to RBI
Mumbai: Chaos reigned outside the Sion branch of the Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) on Tuesday as depositors thronged to withdraw their money after the Reserve bank of India put restrictions on the bank.
Police personnel were seen manning the gate of the branch to ensure that the crowd doesn’t turn violent. Meanwhile, branch officials were replying to queries, trying to assuage concerns of the harrowed customers. While the bank has stopped all transactions, they are allowing customers to take out their belongings from the locker in lots.
Meanwhile at the bank’s Marol branch, the crowd comprising mostly elderly people turned violent, threatening to detain bank officials at the branch. The crowd had ‘gheraoed’ the branch manager, seeking clarity on their deposits. "We have a marriage in the family and all our deposits are in a single account with the bank," said one of the depositors.
Satish Maruti Patik, a 44-year old customer of the bank for the past 20 years, said, “My ₹6 lakh is stuck with the bank. I had deposited ₹2 lakh just two days ago. The bank is saying we could get the money back in 1 month or 2 months or even 6 months. But I wonder if we will get our money back at all," he said.
Watch: Chaos outside Mumbai based PMC bank after RBI imposes restrictions
Like Patil, ₹11,000 crore worth of depositors' money is stuck at the urban-cooperative bank for the next few months.
In a statement issued late on Monday, the Reserve Bank of India (RBI) restricted withdrawal of money from the customers’ account to ₹1000 for six months, "According to the directions, depositors will be allowed to withdraw a sum not exceeding ₹1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI Directions."
The RBI, however, said the issue of directions to PMC Bank should not be construed as cancellation of banking licence by the central bank. PMC Bank can continue to undertake banking business with restrictions till further notice/instructions from RBI. The Reserve Bank may consider modifications of these directions depending upon circumstances. The restrictions will remain in force for a period of six months from the close of business of the bank on 23 September, said RBI.
Further, according to the RBI's restrictions, PMC Bank will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowing of funds and accept fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations, without prior approval in writing from the central bank.
The bank’s managing director Joy Thomas said the lender has been put under restriction due to irregularities disclosed to RBI.
According to March end data, the bank's non-performing assets as a percentage of total assets stood at 3.96% and overdues at ₹331 crore.
“As the MD of the Bank, I take the responsibility and assure all the depositors that these irregularities will be rectified before the expiry of 6 months. All efforts are made to remove the restrictions by rectifying the irregularities," Thomas assured.