PMC Bank withdrawal limit was raised from Rs 10,000 to Rs 25,000.

The Reserve Bank of India raised withdrawal limit for account holders of the stressed Punjab and Maharashtra Co-Operative Bank or PMC Bank to Rs 25,000 from earlier withdrawal limit of Rs 10,000. "The Reserve Bank of India again reviewed the bank's liquidity position and, with a view to reducing the hardship of the depositors, has decided to further enhance the limit for withdrawal to Rs 25,000," the central bank said in a statement.

With the above relaxation, more than 70 per cent of the depositors of the bank will be able to withdraw their entire account balance, RBI's statement added.

Meanwhile, two directors of the real estate firm HDIL that set off the crisis at the Punjab Maharashtra Co-operative (PMC) Bank were arrested by the Mumbai Police. Rakesh Wadhawan and Sarang Wadhawan, senior executives at Housing Development and Infrastructure Ltd (HDIL), were arrested by the Economic Offences Wing of the Mumbai Police on Thursday.

The Reserve Bank of India (RBI) last week moved to take charge of PMC, one of India's top five co-operative lenders with more than nine lakh depositors. Punjab Maharashtra Cooperation (PMC) Bank did not report the financial exposure to the Reserve Bank of India (RBI) for over six years, suspended MD, Joy Thomas admitted on Friday.

The PMC case has sparked renewed concerns about the health of India's troubled banking sector, which has been rocked by a multi-billion dollar fraud at a state-run lender, the collapse of a major infrastructure lender, bad loan issues at state-run banks and a liquidity squeeze that has hit shadow lenders.