In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions
Inching closer to resolving the Punjab and Maharashtra Cooperative (PMC) Bank issue, the Reserve Bank on Monday came out with a draft scheme for the takeover of the crisis-hit bank by the Delhi-based Unity Small Finance Bank (USFB).
The draft scheme of amalgamation envisages the takeover of the assets and liabilities of PMC Bank, including deposits, by USFB, thus giving a greater degree of protection for the depositors, the RBI said.
In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including a cap on withdrawals by its customers, after detection of certain financial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.
USFB, promoted by Centrum Financial Services along with Resilient Innovation Pvt Ltd as a 'joint investor', was granted a banking license in October 2021. USFB started functioning on November 1.
Earlier, Centrum Financial Services, as promoters along with Resilient Innovation as 'joint investor', had expressed interest in February this year in acquiring the PMC Bank through a suitable scheme of amalgamation with a new Small Finance Bank to be registered by the promoters.
Under the draft scheme of amalgamation released on Monday by the RBI, retail depositors have been permitted to withdraw money in a phased manner in case they do not wish to continue their account with the next entity. Initially, the insurance money received from the Deposit Insurance and Credit Guarantee Corporation (DICGC) will be paid to all eligible depositors subject to a ceiling of Rs 5 lakh.
Thereafter the retail depositors will be permitted to withdraw additional amounts in a phased manner: Rs 50,000 at the end of two years; Rs 1 lakh at the end of three years, Rs 3 lakh at the end of four years, and Rs 5.5 lakh at the end of five years. They will be permitted to withdraw their entire amount from the bank after 10 years.
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