The Reserve Bank of India has imposed borrowing and lending restrictions on Mumbai-based Punjab & Maharashtra Cooperative Bank for various irregularities. RBI directed the bank not to grant or renew any loans and advances, accept fresh deposits or disburse any payment in discharge of its liabilities and obligations without the prior consent of the central bank. It also imposed curbs of withdrawals from the bank by its depositors by capping the withdrawals at Rs 1000 from any of the accounts the customers would have in the bank. The directives created panic among depositors in the bank and several hundreds of them were seen crowding at the bank branches. The RBI did not disclose the specific lapses on the part of the bank. However, it is mentioned that under-reporting of NPAs was the main reason for the regulatory action. While the bank reported 3.76% of advances as gross NPAs in March 2019, the actual NPA level is likely to be much higher. The bank has a deposit base of Rs 11617 crore and operations across 7 states. It is among the top 10 cooperative banks in the country. The RBI restrictions will remain in force for 6 months.
