Panic grips as PMC bank goes 'belly up'

Mumbai: A wave of panic and grief struck some pockets of the financial capital-home to the toniest of the domestic and foreign banks-where the urban cooperative bank PMC, which has been placed under RBI restrictions for regulatory lapses Tuesday, has branches.

The development comes amidst the growing gloom among the public who are already battling a deepening slowdown which has resulted in job losses and many other hardships.

Citing many irregularities, including under reporting of bad loans numbers which are said to be high double-digits, the Reserve Bank early Tuesday imposed a slew of restrictions on Punjab & Maharashtra Cooperative Bank (PMC) for six months.

The main curbs include banning PMC from extend new loans and capping cash withdrawals at Rs 1,000 per customer among others. The RBI did not specify the lapses, though.

The scene outside the PMC headquarters at the eastern suburb of Bhandup did not betray the fear among the tens of hundreds of depositors who rushed in, on hearing the news of their bank 'going belly up'.

The panic grew despite the fact the RBI has clearly said that its actions against the bank should not be construed as cancellation of its banking licence.

Those who rushed into the branches speak for itself the profile of PMC customers--autorickshaw drivers, small-time businessmen, pensioners and homemakers and the elderly-and all are united in their worries- the security of their hard- earned money.