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PMC Bank crisis: RBI clarifies of not closing down any bank


SUKIRTI MISHRA 25/09/2019 15:35:20
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HIGHLIGHTS:

--On Tuesday, RBI placed PMC Bank under directions for 6 months


--As the news about PMC bank spread across the country, some fake reports claiming that RBI is closing down certain commercial banks, also appeared in certain sections of social media

 

New Delhi. Rumours of certain commercial banks being shut down by the Reserve Bank of India have been doing the rounds on social media as the aftermath of the RBI placing Punjab and Maharashtra Cooperative Bank under directions for six months. The apex bank, however, has ascertained that all such claims are fake. 

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"Reports appearing in some sections of social media about RBI closing down certain commercial banks are false," tweeted the central bank. Notably, RBI on Tuesday, placed PMC Bank under directions for 6 months. If RBI places a bank under its direction, then it is taking over the operations of the bank and this is normally done when the regulator is not satisfied with the functioning of the bank. This step is taken in order to safeguard the borrowers' interest. 

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The PMC bank news led to the circulation of fake reports claiming RBI is closing down certain commercial banks. PMC Bank MD Joy Thomas stated, "These restrictions have come because of the increase in the certain non-performing assets (NPA). We have been given six months, we assure that even before that we will be able to come out of this situation. If we perform better, RBI can take back this restriction that is the guideline. Even before that, we have to show the performance and it may take the relaxation out. We are standing strong and with all these difficulties we will come out." 

Also Read:  RBI limits PMC Bank withdrawals to Rs 1,000 per account. Details...

 

 

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