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Friday, February 26, 2021

Three offers for PMC Bank revival under evaluation

Last November, PMC Bank had come out with an EoI to identify a suitable equity investor/group of investors willing to take over management control so as to revive it

Written by Khushboo Narayan | Mumbai |
February 6, 2021 4:19:21 am
pmc bank collapse, pmc bank collapse arrests made, Rakesh Wadhawan arrested, Sarang Wadhawan arrestedIn September 2019, the RBI had superseded the board of PMC Bank.

RBI Governor Shaktikanta Das on Friday said that the fraud-hit Punjab and Maharashtra Co-operative (PMC) Bank has received final offers from three investors for reconstruction and the bank is evaluating the proposals.

“I have been informed that three final offers have been received. I am given to understand that the PMC Bank itself is evaluating the offers. Once the evaluation is done, the bank would approach the RBI,” said Das.

PMC Bank is under regulatory restrictions after the Reserve Bank of India (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 The RBI has superseded the board of the bank and appointed an administrator.

Last November, PMC Bank had come 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.

The bank said it has total deposits of Rs 10,727.12 crore, advances of Rs 4,472.78 crore and gross non-performing assets of Rs 3518.89 crore as on March 31, 2020. The share capital of the bank is Rs 292.94 crore. However, the bank registered a net loss of Rs 6,835 crore during 2019-20 and has a negative net worth of Rs 5,850.61 crore.

In January 2021, PMC Bank administrator A K Dixit — in a letter to customers and stakeholders — had informed that three prospective investors were given time till February 1 for submission of their final offer.

In 2019, the Economic Offences Wing (EOW) of the Mumbai police arrested PMC Bank’s former managing director Joy Thomas in connection with the fraud at the bank. The promoters of HDIL, Rakesh Wadhawan and Sarang Wadhawan, too have been arrested and are currently in jail, facing money laundering charges.

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