New Delhi: Gross underreporting of bad loans is one of the primary reasons behind Reserve Bank of India’s (RBI) restrictions on Punjab and Maharashtra Cooperative (PMC) Bank , said two people aware of the development, adding that RBI is currently looking into the books of the bank.

According to the first person, the bank’s management has come clean and the central bank has therefore put restrictions on withdrawals as a precautionary measure to avoid a run on the bank. While the bank’s gross bad loans, as per its FY19 annual report, was at 3.76% of its advances, the bank has now disclosed that it is much higher, the person added.

Chaos reigned outside the Sion branch of the Mumbai-based PMC Bank on Tuesday as depositors thronged to withdraw their money after the Reserve bank of India put restrictions on the bank.

RBI on early Tuesday placed the urban co- operative bank under operational restrictions such as not allowing it give fresh loans, accept fresh deposits and borrowing of funds, among others for six months. One of the major restrictions affecting customers is capping withdrawals at ₹1,000 per customer during the six- month period. The curbs also include ATM transactions and online banking.

People vented out their fury on Twitter at the turn of events. Here are a few tweets illustrating the kind of anger being directed at the authorities on the social media platform.

@RBI everytime bank fraud happens people who are not involved in it i.e common people get punished for the only reason that they have trusted the bank n government #PMC @narendramodi @Dev_Fadnavis y this punishment to us — Swapmay (@Swapmay2) September 24, 2019

What kind of a joke is this @RBI when you allow depositors to withdraw ₹1000/- from #PMC bank after freezing the bank assets. Might as well seal the treasury. — Mangesh Borse (@mjborse) September 24, 2019

WTF is wrong with banks.. @PMC_Bank says they are under 35A of BR by the @RBI and the thing is I have all my savings stuck in that bank and they say I can not withdraw my money now.. What do I do.. People here have all their savings in the bank and the bank says they can’t help — Avinash Sharma (@1989Avinash) September 24, 2019

Crisis at #PMC bank likely just tip of the iceberg. Why did @RBI wait till it got to crisis point before intervening? And how many other cooperative banks in similar dire straits waiting for the RBI to intervene?The poor are disproportionately affected by a crisis in this sector. — Rupa Subramanya (@rupasubramanya) September 24, 2019

Dear @RBI and @DasShaktikanta Please tell depositors why are they being punished in Punjab & Maharashtra Coop Bank? Bank is profitable, why are people suffering? Can't irregularities be fixed without causing such pain?

Are you not answerable to depositors who are in shock? — Sucheta Dalal (@suchetadalal) September 24, 2019

Some Twitter users even made memes to highlight the precarious situation of the customers.

#pmcbank

With one thousand rupees per 6 months, this is what is gonna happen. What else do you expect ? pic.twitter.com/F7SW9bJkLb — Anup Nair (@anup_s_nair) September 24, 2019

I feel for #pmcbank customers right now... One moment and you are left with nothing....#pmc pic.twitter.com/7ktvgrnET8 — Anup Nair (@anup_s_nair) September 24, 2019

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