RBI PUTS CURBS ON OPERATIONS AT PMC BANK FOR SIX MONTHS

MUMBAI: Citing many regulatory lapses, including massive under reporting of non-performing assets (NPAS), the Reserve Bank of India (RBI) on Tuesday put a slew of restrictions on Punjab and Maharashtra Co-operative Bank (PMC) for six months.

The majo r restrictions include capping withdrawals at ₹1,000 per customer during the six-month period, and banning the bank from extending new loans.

The ci t y- based bank has around ₹11,000 crore of public deposits.

“PMC without prior approval in writing from the RBI, will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrowing funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations,” the central bank said in a statement without giving any reasons for the regulatory action.

People familiar with the matter, however, said the regulatory action came primarily because of the massive underreporting of bad loans, which is high double digits.

The urban co-operative bank al s o c annot e nter i nto any arrangement for sale, transfer or otherwise dispose of any of its properties or assets.

The RBI, however, said the move should not be construed as cancellation of it s banking licence.

As per the bank’s annual report, its net profit declined marginally 1.20% to ₹99.69 crore for the year to March 2019, while its net NPAS more than doubled to 2.19% from 1.05%.