OPEN APP
Home >Industry >Banking >Curbs on PMC Bank extended till 30 June

MUMBAI : The Reserve Bank of India (RBI) on Friday said it has extended restrictions on withdrawals and deposits in the Punjab and Maharashtra Cooperative (PMC)Bank till 30 June, as it works to finalize an investor for the scam-hit multi-state cooperative bank.

The central bank had imposed restrictions on PMC Bank in September 2019 after finding financial irregularities. RBI had curbed all activities of PMC Bank and appointed an administrator for the next six months, besides limiting withdrawals from customers’ accounts. The restrictions were set to expire on 31 March 2021.

The extension comes after the delay in finalizing a prospective investor for the bank. PMC Bank had received binding offers from certain investors for its reconstruction in response to the Expression of Interest (EoI) dated 3 November 2020.

“RBI and PMC Bank are currently engaging with prospective investors to secure the best possible terms for the depositors and other stakeholders while ensuring long-term viability of the reconstructed entity. Given the financial condition of PMC Bank, the process is complex and is likely to take some more time," said RBI in its statement.

After superseding the bank’s board, the central bank had found that nearly 73% of the bank’s book is exposed to real estate firm Housing Development and Infrastructure Ltd (HDIL).

In a purported confession letter to RBI, the bank’s managing director and chief executive officer Joy Thomas had accepted giving loans to realty developer HDIL and its related entity to the tune of 6,500 crore without informing all the board members. Thomas was later arrested.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout