It may take more time for depositors of Punjab and Maharashtra Cooperative Bank (PMC Bank) to get their money back in the bank. The Reserve Bank (RBI) said that due to the financial position of the bank, its resolution process is expected to take longer. RBI said that it has received binding offers from several investors for PMC Bank Reconstruction.
With this, the RBI has extended the ban on PMC Bank till 30 June. The RBI said on Friday that it has received several applications for the bank’s reconstruction under the Expression of Interest (EoI) sought on November 3. RBI and PMC Bank want to get the best deals from these investors for the bank’s depositors and other stakeholders. RBI said that it is a very complex process, which may take more time.
According to the proposal of PMC Bank, its restructuring investors will have to invest a minimum capital of 9% of its capital to risk weighted assets ratio. In January 2021, payment service company BharatPay said that it was keen on acquiring PMC Bank.
The bank was dissolved the board
Let us tell you that after several senior employees of the bank were involved in loan fraud and scam, RBI had stopped withdrawing money from the bank on September 1, 2019 and the bank dissolved the board. Many financial irregularities were revealed in the bank. Also, the bank was not given the correct information about the loan given to the real estate company HDIL and there are allegations of scam in it too.
RBI appointed administrator
On June 20, 2020, the RBI had increased the cash withdrawal limit for depositors from Rs 50,000 to Rs 1 lakh. However, the regulatory control on this co-operative bank, which became a victim of the scam, was increased for six months to 22 December 2020. Earlier, on 5 June 2019, the Reserve Bank raised the withdrawal limit to Rs 50,000 per depositor.
At the same time, on September 23, the RBI said that large-scale losses and reduction in deposits are obstacles in the path of revival of PMC Bank. Also, RBI appointed AK Dixit, former general manager of Union Bank of India, as the new administrator for the bank.
This is the whole case
PMC Bank had illegally loaned Rs 6500 crore to the HDIL group, which was 73% of the bank’s total loan book size of Rs 8880 crore in September 2019. The bank had a deposit base of Rs 11,617 crore in March 2019.
After the scam was exposed, former Mumbai Bank MD Joy Thomas and former chairman Varyam were arrested by Mumbai’s Economic Offense Wing in October last year.
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