New Delhi, September 26: The crisis involving the Punjab and Maharashtra Co-operative (PMC) Bank has adversely affected nearly 80 percent of the city's housing societies. Over 28,000 of such societies in the city had their accounts in various branches of the PMC. The cumulative quantum of funds runs into crores as the societies collect thousands to lakhs of rupees per month in form of maintenance. PMC Bank Crisis Explained: Here's Why Customers Are Panicking And Why RBI Has Blocked Withdrawals Exceeding Rs 1,000.

Residents, along with the management of such housing societies, have been gripped under panic since Monday, when the Reserve Bank of India (RBI) imposed crippling restrictions on the operations of the PMC Bank. None of the account holders are permitted to withdraw more than Rs 1,000 from their account, irrespective of the size of deposit.

"We have crores stored in the PMC Bank as we have been depositing our monthly maintenance collection in the bank for the last 5 years," said a treasurer of a top housing society in Navi Mumbai's Nerul.

According to a 2013 directive issued by the Maharashtra government, the housing societies and credit societies were asked to deposit their collections either in co-operative banks or nationalised banks. Since the latter deducted 30 per cent tax on the interest accrued on such deposits, the housing societies preferred to store their collections in cooperative banks.

PMC Bank, which started from Mumbai's Sion, had emerged as the most-preferred lender by most of the housing societies in the city. In Sion alone,the quantum of money of housing societies freezed due to the RBI order is more than Rs 5 crore, reported a leading English daily.

Notably, the funds deposited by housing societies in the co-operative banks are used to pay salaries to cleaners, security guards and accountant. The amount is also used for the periodical repair and maintenance works, along with the payment of water and property taxes. With PMC Bank's operations freezed for the next six months, a massive chunk of Mumbai's housing societies are now left in the lurch.

(The above story first appeared on LatestLY on Sep 26, 2019 10:39 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).