The Reserve Bank of India (RBI) on Tuesday extended the regulatory restrictions on Punjab and Maharashtra Cooperative (PMC) Bank by another three months till March 31, 2022.
The central bank said the sanction of the scheme of amalgamation with Unity Small Finance Bank was under process after comments were received.
"The Reserve Bank of India had prepared a draft scheme of amalgamation of The Punjab and Maharashtra Cooperative (PMC) Bank with Unity Small Finance Bank Ltd. (USFB).
The draft scheme was placed in the public domain on November 22, 2021, inviting suggestions and objections, till December 10, 2021, from members, depositors and other creditors of transferor bank (PMC) and transferee bank (USFB). Further action with regard to sanction of the scheme is under process," an RBI notification read.
"It is hereby notified for the information of the public that the validity of the aforesaid Directive dated September 23, 2019, as modified from time to time, has been extended for a further period from January 1, 2022, to March 31, 2022, subject to review. All other terms and conditions of the Directives under reference shall remain unchanged," the central bank said.
In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including the cap on withdrawals by customers, after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL. The restrictions have been extended several times since then.
Initially, the RBI had allowed depositors to withdraw Rs 1,000, which was later raised to Rs 1 lakh per account to mitigate their difficulties. In June 2020, the RBI had extended the regulatory restrictions on the cooperative bank by six months till December 22, 2020. Later it was further extended till June 30, 2021.
In response to an Expression of Interest (EOI) floated by PMC Bank for its reconstruction in November 2020, certain proposals were received. After careful consideration, the RBI said, the proposal from Centrum Financial Services along with Resilient Innovation was found to be prima facie feasible.
Accordingly, the RBI on June 18, 2021 granted 'in-principle' approval to Centrum Financial Services to set up a small finance bank under the general guidelines for 'on tap' Licensing of Small Finance Banks in the Private Sector. PMC Bank had invited EoI from eligible investors for investment/ equity participation for its reconstruction and had received four proposals.
To launch the SFB, the Centrum Group has formed an equal joint venture with Resilient Innovations, an arm of Gurugram-based BharatPe. But Centrum Capital will be the promoter of SFB, under the prevailing laws. The joint venture will infuse Rs 1,800 crore capital into PMC, Jaspal Bindra, executive chairman of Centrum Group had said.
(Edited by : Jomy Jos Pullokaran)
First Published: IST