New Delhi: Panic among the depositors has been sparked by the Reserve Bank of India (RBI) after it barred the Punjab & Maharashtra Cooperative Bank Ltd (PMC), Mumbai from carrying out the majority of its routine business transactions for a period of six months. With its this decision, the apex bank has sent shock-waves in Mumbai banking and business circles. Due to the restrictions by the RBI, the bank customers will not allowed to withdraw more than ₹1,000 from their accounts, the apex bank's Chief General Manager Yogesh Dayal said. The restriction is on the savings and current accounts or any deposit accounts.

The PMC Bank has been barred from granting, renewing and loans and advances, make any investments, accept fresh deposits, etc, without the prior written approval from RBI.

"According to the directions, depositors will be allowed to withdraw a sum not exceeding Rs 1,000 of the total balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI directions," the central bank said in a statement on Tuesday.

The issuance of RBI directions should not be construed as a cancellation of PMC Bank's licence. The bank will continue to undertake banking business with restrictions till further notice, said the RBI.