OPEN APP
Home / Industry / Banking /  RBI's draft scheme for PMC Bank: Depositors to get their full amount over 10-year period
Listen to this article

MUMBAI : The Reserve Bank of India (RBI) today announced a draft amalgamation scheme of the Punjab and Maharashtra Cooperative (PMC) Bank with Unity Small Finance Bank Ltd. (USFB).

The draft scheme envisages takeover of the assets and liabilities of PMC Bank including deposits, by the USFB in terms of the provisions of the scheme giving a greater degree of protection for the depositors.

It may be seen that USFB is being set up with capital of about 1,100 crore as against regulatory requirement of 200 crore for setting up of a Small Finance bank, the RBI said in a statement.

Further, the scheme notes that equity warrants of 1,900 crore, to be exercised anytime within a total period of 8 years, have been issued by USFB on 1 November, 2021 to the promoters to bring further capital.

The RBI has invited suggestions on the draft scheme till December 10. A final decision will be taken after that, it said.

Under the scheme of arrangement, the depositors will get their full amount back over a period of 10 years. In the initial phase, the Bank will pay amount insured under DICGC of up to 5 lakhs to depositors.

Later, at the end of two years, the Bank will pay up to 50,000, and up to 1 lakh at the end of three years, 3 lakhs at the end of four years, 5.5 lakhs at the end five years and the full amount will be paid after ten years.

RBI said the interest on any of the interest bearing deposits with the Bank will not accrue after March 31, 2021.

No further interest will be payable on the interest bearing deposits of transferor bank for a period of five years from the appointed date. In respect of balances in any current account or any other non-interest bearing account, no interest shall be payable to the account holders, the draft scheme noted.

PMC Bank has been placed under RBI restrictions on September 23, 2019 and the Central superseded the bank’s board on account of fraud.

It is to be noted that USFB, a joint venture between Centrum Group and Bharatpe, has commenced operations as a small finance bank with effect from November 1, 2021.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout