MUMBAI, March 21 (AGENCIES): The Reserve Bank of India (RBI) on Saturday said it has extended regulatory restrictions on Punjab and Maharashtra Cooperative (PMC) Bank for three more months till June 22, 2020.
The RBI had put a six-month regulatory restriction on the bank on September 23, 2019, after finding out certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL.
“It is hereby notified for the information of the public that the validity of the directive dated September 23, 2019, as modified from time to time, has been extended for a further period of three months from March 23, 2020 to June 22, 2020, subject to review,” the RBI said in a release. It could be noted that unlike in the case of commercial banks, the RBI has no powers to draw up an enforceable scheme of reconstruction of a cooperative bank.
“Nevertheless, in the interest of the depositors and the stability of the cooperative banking sector, the RBI, in consultation with various stakeholders and authorities, is trying to work out a scheme for revival of the bank,” the release said.
The restriction on PMC included barring the bank from lending and accepting fresh deposits. The RBI also superseded the board and the management of the bank and appointed an ex-RBI official as the administrator at the bank.