PMC Bank, Unity SFB merger scheme: RBI seeks views on draft

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  • The Reserve Bank of India (RBI) on Monday released a draft scheme of amalgamation of fraud-hit Punjab and Maharashtra Cooperative (PMC) Bank and Delhi-based Unity Small Finance Bank. Unity SFB is a joint venture between Centrum Group and BharatPe. It commenced operations as a small finance bank (SFB) with effect from November 1.
  • According to the draft scheme of amalgamation, following the amalgamation, depositors of PMC Bank will get their money back over a period of 3-10 years. It said the transferee bank (Unity) will first make the payment of up to Rs 5 lakh or less received from DICGC to eligible depositors.
  • For the remaining amount, the bank will pay up to Rs 50,000 above the payment already made at the end of two years, followed by an amount of up to Rs 1 lakh at the end of three years, Rs 3 lakh at the end of four years and Rs 5.5 lakh at the end five years. The RBI said the entire remaining amount will be paid after ten years.
  • The draft said the takeover of assets and liabilities of PMC Bank, including deposits, by Unity, will give a greater degree of protection for the depositors. “It may be seen that Unity SFB is being set up with capital of about Rs 1,100 crore as against a regulatory requirement of Rs 200 crore for setting up of a small finance bank under the guidelines for on-tap licensing of small finance bank in private sector dated December 5, 2019, with provision for further infusion of capital at a future date after amalgamation,” the RBI scheme said.
  • It also said the interest on any interest-bearing deposit with the transferor (PMC) bank will not accrue after March 31, 2021. The RBI said it would receive suggestions and objections on the draft till 5.00 pm, December 10, post which it will take a final call on the merger.
  • Source : indianexpress.com

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