PMC Bank scam: RBI extends withdrawals to Rs 50,000; protest continues

Providing a minor relief to Punjab and Maharashtra Co-operative (PMC) bank depositors, the Reserve Bank of India (RBI) on Tuesday, has enhanced the withdrawal limit for depositors to Rs 50,000 per account. The RBI had previously extended the withdrawal limit to Rs. 40000 from its original Rs.1000. But depositors are still demanding their savings, continuing to protest - 45 days after the central bank took over the bank.

READ | PMC scam claims 9th life even as Bombay HC asks RBI to file affidavit

Protests continue against PMC

Earlier in the day, protestors were detained by Mumbai police for staging a protest near Bandra Kurla Complex against Finance Minister Nirmala Sitharaman, demanding the return of their savings. The Finance Minister was attending an event as a chief guest in NSE (National Stock Exchange) building in the complex. Nine PMC bank depositors have lost their lives since the withdrawals were slashed first.

READ | PMC Bank Crisis: Police agree to RBI's request to auction HDIL assets

HC demands RBI reply to pleas

Meanwhile, the Bombay High Court on Monday asked the RBI  to file an affidavit by November 13 listing the steps to prevent further damage to the depositors. PMC depositors have challenged the RBI’s restrictions on withdrawals and have demanded the HC to fast-track the hearings. Similarly, the Delhi HC too has demanded the RBI to file a reply to a Public Interest Litigation (PIL) seeking the removal of withdrawal limit from the bank by January 22, 2020. Giving relief to the debt-ridden PMC bank, the Mumbai police had agreed to the request of the RBI-appointed administrator to release the attached properties of HDIL for auction, in connection with the PMC bank scam.

READ | Mumbai Police detains PMC Bank depositors amid protest against FM

RBI mulling merger?

Meanwhile, on 29 October, the RBI was mulling at a potential merger of the debt-ridden PMC Bank with any willing bank, according to a statement released by the RBI to protestors. The central bank has assured depositors who are still protesting, that their money is safe and the RBI is contemplating a potential merger. The central bank also urged any willing bank to step forward in the case.  A delegation of 10 depositors, who were protesting, met with RBI officials and were assured that their money is safe and would be granted relief soon.

READ | PMC Bank depositors request Bombay HC to fast-track case hearing

What is the PMC Bank Scam?

On September 21, the RBI took control of the bank for six-months. It had also capped withdrawals at ₹1,000 per account and the bank is not allowed to make any fresh loans for six months. The withdrawal limit has been increased to Rs. 40,000 as of Tuesday. After the takeover, PMC Bank which has Rs. 11,500 crore deposited the bank and has 137 branches, had admitted that one large account-HDIL was the sole reason for the present crisis, as per PTI. Following this, the HDIL directors Sarang Wadhawan and Rakesh Kumar Wadhawan who had been arrested in connection with a fraud of over Rs 4,355 crores, have been sent to custody. According to the police, PMC Bank officials gave loans to HDIL between the year 2008 and August 2019 despite not paying the previous loans. The Wadhawans along with Waryam Singh- all HDIL promoters - and PMC bank's ex-chair Joy Thomas are being investigated.