Restrictions on PMC Bank Extended by RBI

The Reserve Bank of India (RBI) extended the restrictions on the withdrawal and deposits in the scam-hit Punjab and Maharashtra Cooperative (PMC) Bank till June 30.

The Maharashtra-based cooperative bank was placed under restrictions with effect from close of business on September 23, 2019 in the interest of depositor protection. The directions were last extended up to March 31, 2021.

PMC Bank had received binding offers from certain investors for its reconstruction, in response to the Expression of Interest (EOI) dated November 3, 2020 floated by the bank.

In a statement, the central bank said that along with PMC, it is presently engaging with prospective investors in order to secure best possible terms for the depositors and other stakeholders while ensuring long term viability of the reconstructed entity.

Given the financial condition of the PMC Bank, the process is complex and is likely to take some more time.

"In the circumstances, it is considered necessary to extend the aforesaid Directions. Accordingly, it is hereby notified for the information of the public that the validity of the aforesaid Directive dated September 23, 2019, as modified from time to time, has been extended for a further period from April 1, 2021 to June 30, 2021, subject to review," it said.

It may be clarified that the process of reconstruction will be commenced as soon as the aforesaid objectives are achieved to the best possible extent, RBI added.