Large scale withdrawal besides the news of a build-up in non-performing assets and attendant capital erosion prompted the RBI to take action and place restrictions on September 23.
Large amounts of withdrawals from numerous accounts of PMC Bank forced the Reserve Bank of India to impose curbs on the bank, reported Mint. Amounts, the report said, worth more than 5 percent of total deposits were taken out during this period.
A person close to the development told Mint that the phenomenon began on September 19. This large scale withdrawal besides the news of a build-up in non-performing assets and attendant capital erosion prompted the RBI to take action and place restrictions on PMC Bank on September 23.
“Financial irregularities including deposit erosion beyond a certain level would trigger directions being imposed on banks," the person was quoted as saying in the report.
Currently, the report said, the details of the depositors involved in large scale withdrawal is yet to be ascertained and will be disclosed once the central bank completes its inspection.
The development comes after the RBI had put a slew of restrictions on the bank for six months on September 23. The restrictions included curbs on fresh lending, accepting fresh deposits and investments, among others.
The withdrawal limit for account holders was also kept at Rs 1,000 for six months, which was later raised to Rs 10,000. The regulator also dismissed the board and suspended Thomas. It appointed J B Bhoria as the administrator at the bank.