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Reserve Bank of India on Friday extended restrictions on crisis-ridden Punjab and Maharashtra Co-operative (PMC) Bank by three months till 31 March, 2021.

RBI also said that four proposals have been received for the Expression of Interest (EoI) sought by the fraud-hit multi-state urban cooperative bank from potential investors for investment or equity participation in the bank for its reconstruction.

"These proposals will be examined by the bank with regard to their viability and feasibility taking into account the best interest of the depositors. To undertake this process, the bank would need some more time," said RBI.

The last date for submission of EoI by potential investors was 15 December.

In September, 2019, the Reserve Bank of India had superseded the board of the multi-state urban cooperative bank and placed it under various regulatory restrictions after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL. It's exposure to HDIL was over 6,500 crore or 73 per cent of its total loan book size of 8,880 crore as of September 19, 2019. Initially, the RBI had allowed depositors to withdraw 1,000 which was later raised to 1 lakh per account to mitigate their difficulties. In June this year, the RBI had extended the regulatory restrictions on the cooperative bank by another six months till December 22, 2020. As of March 31, 2020, the PMC Bank's total deposits stood at 10,727.12 crore and total advances at 4,472.78 crore. Gross NPA of the bank stood at 3,518.89 crore as of end-March.

The share capital of the bank is 292.94 crore. During 2019-20, it registered a net loss of 6,835 crore and has a negative net worth of 5,850.61 crore. As per the details of the proposal, the eligible investors could be financial institutions, including banks and NBFCs; and individuals or group of individuals/ companies, societies, trusts or any other such entities having adequate networth. “The investor(s) should ideally bring in the capital required for enabling the bank to achieve the minimum required capital to risk weighted assets ratio (CRAR) of 9 per cent," it said. However, the investors may explore the option of restructuring a part of deposit liabilities into capital/capital instruments, the bank said.

The central bank appointed A K Dixit as the new administrator of the bank in September this year.

With agency inputs


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Updated: 18 Dec 2020, 05:24 PM IST
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