PMC Bank Crisis: RBI Rejects Reports of Closing Down Commercial Banks As Customers Panic

New Delhi, September 25: The Reserve Bank of India (RBI) on Wednesday, September 25, clarified that the reports of the central banking institution closing down certain commercial banks are false. This development comes after the RBI imposed sanctions on Punjab and Maharashtra Cooperative (PMC) Bank for alleged irregularities. PMC Bank Crisis Explained: Here's Why Customers Are Panicking And Why RBI Has Blocked Withdrawals Exceeding Rs 1,000

Denying any move of closing down the commercial banks, the Reserve Bank of India in a tweet said, "Reports appearing in some sections of social media about RBI closing down certain commercial banks are false." PMC Bank Depositors Raise Hue and Cry on Twitter After RBI Blocks Withdrawals Exceeding Rs 1000 Per Account.

Tweet by RBI:

Reacting to the rumours, Finance Secretary Rajeev Kumar said, "There are mischievous rumours on social media about RBI closing some banks. No question of closing any public sector bank, which are articles of faith. Rather govt is strengthening PSBs with reforms and infusion of capital to better serve its customers."

Finance Secretary Rajeev Kumar's statement:

The central bank on Tuesday put restricts on PMC Bank and barred it from allowing withdrawals of over Rs 1,000 per account. The RBI also barred the bank from renewing or granting new loans, accepting fresh deposits or making any investments. The restrictions will remain effective for six months or any further notice.

The decision was taken because of alleged irregularities involving the bank. The RBI, on September 23, issued an order under subsection 1 of Section 35-A of the Banking Regulation Act (BRA), 1949 which allows the Central Bank to impose limitations on banks suspected of flouting norms.

(The above story first appeared on LatestLY on Sep 25, 2019 03:22 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).