PMC Bank Crisis: Gurdwaras face severe fund crunch before Gurpurab, over Rs 1000 crore deposit locked in accounts

Several Gurdwaras are on the brink of trouble as they face a severe fund crunch before Gupurab on November 12, on account of not being able to withdraw deposits in the fraud-hit Punjab and Maharashtra Cooperative (PMC) Bank worth over Rs 1,000 crore in aggregate due to withdrawal restrictions imposed by the Reserve Bank of India (RBI). Several of the Gurdwaras which had deposited their money in PMC Bank accounts expressed their agitation on Monday over the withdrawal limit, citing religious reasons.

PMC Bank account holders have been allowed to withdraw Rs 25,000 from the bank in the next six months. The curb on withdrawal has been imposed by the RBI after the fraud came to light. The apex bank had initially allowed the withdrawal of only Rs 1,000 within six months which was later increased to Rs. 10,000 and then hiked to Rs 25,000 on Thursday, i.e. October 3.

RBI Chief General Manager Yogesh Dayal in a press release had stated that the decision to modify the withdrawal limit was taken after reviewing PMC Bank's liquidity position and in order to reduce the hardships faced by the depositors.

Earlier, it was said that the RBI-appointed administrator of Punjab and Maharashtra Cooperative Bank (PMCB) is open to allowing the troubled bank to resume normal banking operations within a month if large depositors give a commitment that they would not withdraw their deposits for three years.

On Saturday, Waryam Singh was arrested from Mahim. This is the third major arrest in the case in the past three days. Earlier on Thursday, the police nabbed HDIL Chairman and Managing Director Rakesh Kumar Wadhwan and Sarang Wadhwan, respectively, and their assets worth Rs 3,500 crore were frozen. The bank had given Rs 6,500 crore of loans to HDIL, which is 73% of the bank's advances in contravention of RBI's regulations, which only allows 15% of the funds to be lent to a single entity.

A whistle-blower, who is an employee of the bank, alerted RBI about large loans sanctioned to real estate developer HDIL. Depositors say that it is RBI's fault that audits were certified when in fact the bank was dressing up the accounts with dummy accounts for the past 8 years.