June 26, 2021 5:42:52 am
The Reserve Bank of India (RBI) has extended the directions earlier imposed on Punjab and Maharashtra Co-operative Bank (PMC Bank) till December 31. The central bank recently gave in-principle nod to Centrum Group to set up a small finance bank to acquire the crisis-hit PMC Bank.
“Taking into account the time required for completion of various activities involved in the process, it is considered necessary to extend the aforesaid Directions.
“Accordingly, it is hereby notified for the information of the public that the validity of the aforesaid Directive dated September 23, 2019, as modified from time to time, has been extended for a further period from July 1, 2021 to December 31, 2021, subject to review,” the RBI said.
As of March 2020, the latest data available, PMC Bank had a deposit base of Rs 10,727 crore and loans worth Rs 4,473 crore. The share capital of the bank is Rs 292.94 crore. However, it registered a net loss of Rs 6,835 crore during 2019-20 and has a negative net worth of Rs 5,850.61 crore.
PMC Bank is under regulatory restrictions after the RBI found out financial irregularities in its functioning as well as hiding and classification of loans given to Housing Development Infrastructure Ltd (HDIL). The bank has an exposure of over Rs 6,200 crore to HDIL. The RBI has superseded the board of the bank and appointed an administrator in September 2019.
Last year in November, the bank came out with an EoI (expression of interest) to identify a suitable equity investor/group of investors willing to take over management control, so as to revive the bank and commence its day-to-day operations. Bharat Pe and Centrum Group reportedly submitted a joint EoI to the Reserve Bank to collectively take over the troubled PMC Bank.
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