The Reserve Bank of India (RBI) has put Punjab and Maharashtra Cooperative Bank under restrictions for six months, meaning the lender cannot give fresh loans and accept fresh deposits. Withdrawals have been capped at Rs 1,000 per account.

When a bank is put under restriction, usually, depositors cannot withdraw money and the bank cannot give fresh loans and accept fresh deposits. These restrictions are put when there are three consecutive years of adverse supervisory report.

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RBI imposes restrictions on PMC Bank; withdrawal restricted to Rs 1,000 per account

The last available accounts of the bank show a profit of Rs 99 crore and a net NPA of 2.19 percent. Sources have told CNBC-TV18 that the bank has given fraudulent loans and not disclosed its bad loans (NPAs). It is also learnt that loans may have been given to some real estate company / companies.

It is important to note that RBI has taken over as administrator of the bank only on Monday night. It is believed that the bank has maintained its SLR (statutory liquidity ratio) and CRR (cash reserve ratio) and so small depositors (people holding less than Rs 1 lakh) should get access to their deposits soon.

First Published:Sept 24, 2019 4:28 PM IST