Today in the Lok Sabha, Nirmala Sitharaman, Union Finance Minister said that around 78% of the fraud hit PMC (Punjab and Maharashtra Co-operative) Bank’s depositors have been permitted to pull out their entire sum, however the Rs. 50,000 limit on withdrawal still continues.
Sitharaman added that the depositors of the Punjab and Maharashtra Co-operative Bank can withdraw a maximum of Rs. 1 lakh in case of weddings, medical emergencies, and other critical situations by invoking RBI (Reserve Bank of India) ‘Hardship Provisions’.
In the Lok Sabha, she said ‘Nearly 78 percent depositors are now allowed to withdraw their entire account balance. They are small depositors. With this, the concerns of all small depositors are take care of’.
The Finance Minister also said that suitable steps are being undertaken to seize the properties belonging to PMC Bank’s promoters. She added, that the properties will be auctioned and the money obtained will be used to repay the depositors.
Sitharama also claimed that even though depositors have to abide by the rule of Rs. 50,000 withdrawal limit, there are exceptions wherein the depositors will be able to withdraw a maximum of Rs. 1 lakh by citing ‘hardship provision’ of the apex bank. The exception scenarios comprise of Education, Wedding, Medical Emergencies, and more.
According to Economic Offences Wing (EOW) of the Mumbai Police, the management of the Punjab and Maharashtra Co-operative Bank were part of alleged collude with a big-time business family. In the conspiracy the loan defaults of the HDIL (Housing Development and Infrastructure Limited) group firms were hidden from the banking regulators’ inspections.
According to the EOW, around 70% of the PMC Bank’s loans were given to HDIL Group, and when the company could not repay the amount, it became a grave problem for the bank. On the 24th of September, the Central Bank barred PMC Bank management from undertaking any operations to run the bank and even appointed Jai Bhagwan Bhoria as the administrator after RBI found irregularities in the bank’s finances.