PMC bank’s 36th Annual General Meeting stands cancelled due to restrictions by the Reserve Bank of India (RBI). The meeting was scheduled to be held on September 28. Managing director Joy Thomas (now suspended) of the bank notified to stakeholders on September 25.
According to Money Control report, the notification reads:
"I, Mr. Joy Thomas, MD, hereby inform you that as your PMC Bank has been put under regulatory restriction under the Section 35A of B.R Act by RBI for a period of six months, the Board has been superseded and Administrator has been appointed. Therefore, the 36th annual general meeting of the bank proposed to be held on Saturday, 28th September…stands cancelled."
The restriction
The Reserve Bank of India (RBI) has restricted activities of Punjab and Maharashtra Cooperative Bank (PMC Bank) for six months and asked it to not grant or renew any loans and advances, make any investment or incur any liability, including borrowal of funds and acceptance of fresh deposits.
"According to the directions, depositors will be allowed to withdraw a sum not exceeding Rs 1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI directions," the central bank said in a statement on Tuesday.
Joy Thomas asserted that all its loans are fully secured, the management admitted that one large account-HDIL--is the sole reason for the present crisis leading to the regulatory action Tuesday when RBI superseded its management and placed it under an administrator for the next six months, according to PTI report.
The regulator has also capped cash withdrawal at Rs 1,000 per customer during this period and also banned the bank from any fresh lending during this period. Though the bank's now suspended managing director Joy Thomas did not disclose the exposure to HDIL, which he described as the largest and one of the oldest customers, he said all other accounts are safe and fully-secured.
"All other loans are more than fully-secured and there is no need for any customer to panic," Thomas told PTI in an interview Wednesday evening. "We have enough liquidity and back-up securities for all what we have lent. As a cooperative bank, we never do unsecured lending and our loan coverage ratio has always been 100-110 percent," Thomas said.
Customers’ compliant
Several account holders of the crippled Punjab and Maharashtra Cooperative (PMC) Bank filed a joint police complaint on Thursday against the bank's chairman and its directors for alleged misappropriation of funds of the customers, a police officer said. A delegation of account-holders went to Sion police station in central Mumbai and submitted the complaint against officials of the bank, on which the RBI has imposed operational restrictions, he said.
The delegation in its complaint alleged that at least 14 people, including the PMC Bank's chairman and all its directors, were involved in misappropriation of funds of the account holders, he said. They requested the police to take proper action against those named in their complaint and confiscate their passports, so that they are not able to escape from the country, the official said.
They also sought an explanation from the bank's chairman and directors over misappropriation of funds of the customers, he said. "We have received a written application from account holders of the PMC Bank. Further action will be taken after examining the complaint," the police officer said.
(In puts from agencies)
