MUMBAI (Reuters) - The Reserve Bank of India (RBI) on Saturday extended regulatory restrictions on Punjab and Maharashtra Cooperative (PMC) Bank for another three months until June 22 as it works on a plan for the bank’s recovery.
In September, the central bank put the curbs on the cooperative bank for six months after finding financial irregularities such as under-reporting of bad loans.
“The RBI, in consultation with various stakeholders and authorities, is trying to work out a scheme for revival of the bank. In order to take this forward, it is considered necessary to extend the aforesaid Directions for a further period of three months,” the central bank said in a statement.
Under the restrictions, withdrawals by the bank’s depositors have been limited, while the bank itself has been put under the direction of the central bank and barred from renewing, or granting any loans, or making investments without prior approval of the RBI.
According to a police complaint lodged by Indian government officials, PMC allegedly made more than 21,000 fictitious accounts to hide loans it made to now bankrupt realty company Housing Development and Infrastructure Ltd (HDIL.NS).
Reporting by Rajendra Jadhav; Editing by Helen Popper