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New Delhi: Scam-ridden PMC Bank on Tuesday has sought proposals for equity investment for reconstruction of the bank.

Punjab and Maharashtra Cooperative Bank said the new buyer must be willing to take over management control for bank revival.

Investors can convert PMC to a small finance bank after normalisation of operations.

It's been just over a year since the RBI placed withdrawal restrictions on the bank after a mega scam involving misreporting of loans with senior bank officials' involvement came to light.

The potential investors who are interested in taking up equity interest in the bank for its reconstruction must submit Expressions of Interest (EOIs) by 15 December, said the bank.

On 23 September, 2019, the Reserve Bank of India had superseded the board of the multi-state urban cooperative bank and placed it under various regulatory restrictions after detection of certain financial irregularities. 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 22 December, 2020.

The RBI, in September, said huge losses and erosion of deposits at PMC Bank continue to cause hindrance in its revival. “While the administrator of PMC bank and the RBI have been exploring various options for resolution of the bank, several factors such as huge losses incurred by the bank resulting in its entire net worth getting wiped out, steep erosion in deposits, etc. continue to pose serious challenges in finding a workable plan for revival of the bank," RBI said on Tuesday. It said the bank has also been making efforts for recovery of NPAs although progress has been constrained because of the COVID-19 pandemic and legal complexities. Nevertheless, in the interest of depositors, the PMC Bank and the RBI are continuing to engage with stakeholders to explore the possibility of finding a viable and workable solution for the resolution of the bank, RBI further said.

PMC Bank had hidden and misreported loans given to real estate developer HDIL. Its exposure to HDIL Group was over 6,500 crore, nearly 73 per cent of its total loan book size of 8,880 crore as of September 19, 2019. As on March 31, 2019, its deposit base was 11,617.34 crore.

The misdoing at the bank was leaked by one of its board members to the RBI, forcing its former managing director, Joy Thomas, to confess to the regulator about misreporting of loans. Thomas along with the bank's former chairman Waryam Singh were arrested in October last year. The Economic Offences Wing (EOW) of Mumbai Police had later arrested few more officials of the bank in the fraud case.

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