The Reserve Bank of India (RBI) on Friday has given its in-principle approval to Centrum Financial Services for the takeover of scam-hit Punjab and Maharashtra Cooperative (PMC) Bank.
Financial services firm Centrum will be allowed to set up a small finance bank with the PMC takeover.
The in-principle approval has been accorded in specific pursuance to the Centrum Financial Services Limited’s offer dated February 1, 2021, in response to the Expression of Interest notification dated November 3, 2020, published by the Punjab & Maharashtra Co-operative Bank Ltd., Mumbai, the central bank said in a statement.
RBI said, "The Reserve Bank of India (RBI) has today decided to grant “in-principle” approval to Centrum Financial Services Limited (the applicant) to set up a small finance bank under general “Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector” dated December 5, 2019,"
"The RBI would consider granting a licence for commencement of banking business under Section 22 (1) of the Banking Regulation Act, 1949, on being satisfied that the applicant has complied with the requisite conditions laid down by RBI as part of “in-principle” approval," it said.
BharatPe and Centrum Group are among four groups that have made the submissions to the Reserve Bank of India (RBI) for the acquisition.
In September 2019, the RBI had imposed restrictions on the fraud-hit multi-state urban cooperative bank, including on withdrawals by customers, following a scam. Depositors had held several protests demanding their money back.
On September 23, 2019, the RBI had superseded the board of PMC and placed it under various regulatory restrictions after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL.
As of March 31, 2020, PMC Bank's total deposits stood at Rs 10,727.12 crore and total advances at Rs 4,472.78 crore. The gross NPA of the bank stood at Rs 3,518.89 crore as of end March.
The share capital of the bank is Rs 292.94 crore. During 2019-20, it registered a net loss of Rs 6,835 crore and has a negative net worth of Rs 5,850.61 crore.
First Published: IST