Reserve Bank of India has made an extension of the restrictions on PMC Bank
The Reserve Bank of India (RBI) has extended till December 31 the limitations placed on Punjab and Maharashtra Co-operative Bank (PMC Bank).
Centrum Group has received RBI’s in-principle approval to establish a small finance bank to acquire PMC Bank, which is in the midst of a financial crisis.
“It is regarded appropriate to continue the aforesaid Directions, taking into consideration the time required for completion of various actions involved in the process,” the Central Bank said in a statement.
After discovering certain financial irregularities, including hiding and misreporting of loans given to real estate developer HDIL, the RBI superseded the board of PMC and placed it under regulatory restrictions, including a cap on customer withdrawals, in September 2019, the RBI superseded the board of PMC and placed it under regulatory restrictions, including a cap on customer withdrawals.
Since then, the limits have been extended multiple times in the interest of depositor safety, RBI placed PMC Bank under directives under Sub-section (1) of Section 35-A read with Section 56 of the Banking Regulation Act, 1949, with effect from close of business on September 23, 2019. The directives were last extended to June 30, 2021, with a directive dated March 26, 2021.