Categories: Banking

RBI revealed a Draft Scheme for amalgamation of PMC Bank

The Reserve Bank of India (RBI) revealed a draft scheme for amalgamating the Punjab and Maharashtra Cooperative (PMC) Bank with the Delhi-based Unity Small Finance Bank Ltd (USFB). Unity Small Finance Bank is a joint venture between Centrum Group and Bharatpe. It has commenced operations as a small finance bank with effect from November 1, 2021. According to the draft scheme of amalgamation, the takeover of the assets and liabilities of PMC Bank, including deposits, by Unity will give a greater degree of protection for the depositors.

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The suggestions and objections to the draft scheme are open till December 10, 2021. PMC Bank Limited based in Mumbai, Maharashtra was placed under All-Inclusive Directions under Sub-section (1) of Section 35-A read with Section 56 of the Banking Regulation (BR) Act, 1949 on September 23, 2019, on account of fraud which led to a steep deterioration in its net worth. The RBI scheme also said that for institutional depositors 80 per cent of the uninsured deposits outstanding will be converted into Perpetual Non-Cumulative Preference Shares (PNCPS) with the dividend of one per cent per annum payable annually.

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Sumit Arora

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