Page 10 - Banking Finance December 2019

RBI CORNER

RBI reveals 'on tap' RBI increases withdrawal limit of PMC Bank customers
norms for grant financial to Rs. 50,000
aid from DEAP The RBI has recently increased the withdrawal limit for customers of Punjab
and Maharashtra Cooperative (PMC) Bank to Rs.
In a bid to widen and deepen the de-
positor 50,000. “The Reserve Bank of India, after reviewing
awareness the bank’s liquidity position and its ability to pay its
efforts, the depositors has decided to further enhance the limit
Reserve for withdrawal to Rs. 50,000,Rs. inclusive of Rs.
Bank of In- 40,000 allowed earlier.
dia has decided to call for fresh appli- With the above relaxation, more than 78% of the depositors of the bank will be
cations ‘on tap’ for grant of financial able to withdraw their entire account balance," according to RBI statement.
assistance from the Depositor Educa-
tion and Awareness Fund (DEAP). In RBI added it is closely monitoring the developments and shall continue to take
this regard, the central bank has un- necessary steps in the interest of the depositors of the bank. On 23 September,
veiled guidelines on the criteria for RBI barred the bank from carrying out any operations for the next six months.
registering institutions, organisations, It had initially capped the deposit withdrawal at Rs. 1,000 per account which
and associations 'on tap'. was relaxed to Rs. 10,000 in two days and then further increased to Rs. 25,000
and later Rs. 40,000.
The entities engaged in activities re-
lated to educating bank depositors The central bank’s action came after it found certain irregularities in the bank,
and creating awareness by conduct- including under-reporting of non-performing assets (NPAs) and large deposit
ing awareness programmes, withdrawals.
organising seminars, symposia, in-
cluding research activities, are eli- New depts. set up by RBI for better supervision, regu-
gible for registration.
lation of banking sector
Further, entities constituted as a Pub-
lic Charitable Trust; registered under The RBI has re-organised its supervisory and regulatory functions into two de-
the Societies Registration Act, 1860; partments in order to deal with potential systemic
a trust under India Trusts Act, 1882; risks more effectively. The move came at the back-
registered under the State Co-opera- drop as the RBI was not able to prevent scams in the
tive Societies Acts; registered under banking sector.
section 25 of the Companies Act, 1956 The central bank had separate departments for su-
or Section 8 of the Companies Act,
pervisory as well as regulatory functions, which have
2013; a university established by law;
been integrated into two unified departments.
and any other educational institution
recovnised by the government are eli- The development follows the RBI’s central board decision to create separate
gible for registration. supervisory and regulatory cadre.
The entity should have rules, regula- “The Reserve Bank of India has reorganised its regulatory and supervisory de-
tions and/or buy-laws for its gover- partments,” the RBI said in a statement.
nance and management, which
“It has been decided to integrate the supervision functions into a unified De-
should be in conformity with the
conditions of registration. partment of Supervision, and regulatory functions into a unified Department of
Regulation with effect from November 1,” the central bank said. The Central
It should be managed by a govern-
Board of the RBI, in its meeting on May 21, approved the creation of separate
ing board/management committee supervisory and regulatory departments. The restructuring of regulatory and
as envisaged under the laws under
which it is established/incorporated. supervision functions is among the series of steps the RBI will take to imple-
ment this decision.

10 | 2019 | DECEMBER | BANKING FINANCE