On a review of the PMC bank’s liquidity position, RBI has decided to enhance the limit for withdrawal to Rs 1,00,000/- (Rupees One Lakh only) per depositor, inclusive of Rs 50,000 allowed earlier.
With the above relaxation, more than 84% of the depositors of the bank will be able to withdraw their entire account balance, claimed RBI in a press release. All other terms and conditions of the Directives under reference shall remain unchanged, it added.
The Reserve Bank is closely monitoring the position and shall continue to take further steps as are necessary to safeguard the interest of the depositors of the bank.
RBI has also extended Direction on the UCB for a further period of six months from June 23, 2020 to December 22, 2020 subject to review.
Reserve Bank has been engaging with the stakeholders to explore the possibility of a resolution of the bank. However, the process has been affected due to the lockdown on account of COVID 19 and the continuing uncertainty around the pandemic.
Further, the extent of the negative net worth of the bank, and the legal processes involved in recovery of bad debts also pose challenges/limitations in resolution of the bank.
Nevertheless, consultation with various stake-holders and authorities for resolution of the bank is continuing. It is, therefore, considered necessary to extend the aforesaid Directions for a further period of six months to take the process forward.