The RBI Chief General Manager Yogesh Dayal said that the decision came in the wake of a preliminary assessment by the administrator of the PMC Bank's latest depositor and liquidity profile.
Accordingly, depositors can now withdraw up to Rs 10,000, including the Rs 1,000 permitted earlier, of the total balance in every savings, current, or any other account for the next six months.
With the relaxation, more than 60 per cent of the bank depositors would be able to withdraw their entire account balance.
The RBI said that it had reviewed the position and allowed the relaxation to reduce the hardships of the depositors.
Taking up the cause of the desperate bank customers, Opposition Congress leader Sanjay Nirupam has written to RBI Governor Shaktikanta Das, highlighting the alleged irregularities in the PMC Bank.
He said that PMC Bank had huge exposure to a defaulting realty major, resulting in an unprecedented hike in its non-performing assets (NPAs), and the bank manipulated its audit report which came to light very late in an RBI inspection.
On Thursday afternoon, Nirupam led a delegation of PMC Bank's aggrieved customers to the RBI and also visited one of the bank's suburban branches in Bhandup. He is supposed to meet the apex bank's top brass again on Monday.
"Instead of punishing the ordinary customers, the RBI must order the lodging of an FIR against the PMC Bank directors and officials for their deliberate crimes, and probe the nexus between them and the failed builders which led to this mess," Nirupam told mediapersons.
In a pre-festival season jolt to lakhs of unsuspecting customers, the RBI on September 24 barred the Punjab and Maharashtra Cooperative (PMC) Bank from carrying out a majority of its routine business transactions for a period of six months.
The move sent panic waves among the depositors, investors and the city's banking and business circles. PMC Bank ranks among the top 10 cooperative banks in the country.
Described as a multi-state cooperative banking entity founded in 1984 from a small room in Mumbai, the PMC Bank has grown to 137 branches in Maharashtra (103), Delhi (6), Karnataka (15), Goa (6), Gujarat (5) and Madhya Pradesh (2).
As per the RBI orders, the PMC Bank is debarred for six months from granting or renewing any loans and advances, making any investments, incurring any liability, including borrowal of funds or accept fresh deposits, etc., without prior written approval from the RBI.
Confusion reigned supreme outside many of the PMC Bank branches in Mumbai, Thane and other cities as depositors mostly MSMEs and ordinary families made a beeline to get their monies back, but they were not allowed.
As per the PMC Bank's latest annual report, it has deposits of over Rs 11,617 crore and loans/outstandings of Rs 8,383 crore.
( With inputs from IANS )