RBI has prepared a draft plan for PMC Bank’s amalgamation with Unity Small Finance BankReserve Bank of India (RBI) on Monday unveiled a draft scheme for amalgamation of the troubled Punjab and Maharashtra Cooperative Bank (PMC) and Unity Small Finance bank (USFB).The draft plan proposes USFB taking over the assets and liabilities of PMC Bank including deposits, which would provide a greater degree of protection to depositors.RBI has sought suggestions or objections, if any, from depositors, members and creditors of PMC Bank as well as of USFB on the scheme by December 10, 2021. After the expiry of the deadline, the central bank will take a final call on the matter.The plan has been put up on the central bank’s website.The RBI further said that “USFB 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”.Maharashtra-based PMC Bank was placed under business restrictions with effect from September 23, 2019, on account of fraud, which led to steep deterioration in the net worth of the bank.The directions were last extended through a June 25, 2021 directive up to December 31, 2021.“Given the financial condition of the PMC Bank and in the absence of proposals for capital infusion, the bank was not viable on its own. In that event, the only course of action could have been cancellation of its licence and taking it for liquidation, wherein depositors would have received payment up to the insurance ceiling of Rs 5 lakh,” the RBI said.Keeping in mind the interest of its depositors, the amalgamation scheme has been unveiled, which would provide them protection, the central bank said.
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