Mumbai: Sion housing societies have Rs 5 crore stuck in PMC Bank

Worried society office bearers visited PMC bank branch offices. Pic/Suresh Karkera

Many housing societies in Pratiksha Nagar, Sion, are facing a funds crisis, after the RBI on Tuesday placed the Punjab and Maharashtra Co-operative Bank (PMC) under operational restrictions. Panicked society office bearers visited its branch offices. Many housing societies have their accounts in co-operative banks. While some societies in Sion have funds only in PMC bank, some societies have kept them in multiple banks.

The Sion-Pratiksha Nagar Cooperative Housing Society Association has 36 societies as members. The buildings were built by MHADA and 14 of the societies have their accounts and up to R5 crore in all in PMC bank. The restrictions on PMC bank will affect more than 1,500 families in this area.

The societies need R2 to 2.5 lakh for monthly expenses like water bill, salaries for security guards, sweepers etc. "Many societies have their accounts only in one bank, now they are facing an issue," said Ankush Sarang, chief promoter of the Association. Vinayak Dhatraj, secretary of the Association, and some of its members met PMC bank officers. The officers assured them that their savings are safe. Dhatraj said, "Now we have called a meeting on Sunday to discuss the further move. We will request RBI to allow withdrawal of R2 lakh per society as emergency funds for monthly expenses."

"As per the by-laws of cooperative societies, it is mandatory to open an account in co-operative banks. Besides, these banks are open in the late evenings and on Sundays. It helps society members. This branch is also close to our buildings," said another member of the Association. Sandip Kadam, a resident of Kamgar Nagar in Kurla, said, "We have our sinking fund in another co-operative bank. The society has also kept its savings in another nationalised bank for better interest and security. So there isn't a panic situation at our end."

Arun Kejariwal, secretary of Raj Residency of Mahavir Nagar from Kandivali, told mid-day that his society has put their funds in three co-operative banks. Though the society's funds are safe he stated that its staff have accounts in PMC bank. "RBI should ensure the security of the depositors' money. It is not about co-operative or nationalised banks. Co-operative banks have issues about recovery, RBI should examine the transactions of banks strictly," said Kejariwal.

Central Railway will pay employees by cheques

Hundreds of government employees have their salary accounts in PMC bank. Central Railway sent a letter to the DRM, CSMT on Wednesday, regarding its employees who have salary accounts with PMC bank. As per the letter, 90 employees who draw salary from PMC bank will get it by cheque.

Why housing societies prefer co-op banks

The government introduced the guideline on December 5, 2013, that housing societies can deposit their funds in a cooperative bank, which has an A class audit grade for the previous three years, or with a nationalised bank. "But nationalised banks have a lesser interest rate, the procedure is more cumbersome and the timings and location of branches are not convenient. But more than that, the interest attracts 30 per cent income tax. Due to these reasons co-operative societies prefer co-operative banks," said Ramesh Prabhu, founding chairman of the MSWA (Maharashtra Societies Welfare Association). He said now the secretaries and chairmen are inquiring with them about the background of the PMC bank issue. "We are telling them the pros and cons of both, they have to take decisions in AGM," he said.

Also Read: Account holders worried after RBI places restrictions on PMC bank

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