RBI extends restrictions on PMC Bank for 3 months till March 2022

The RBI has extended the restrictions as further action on the draft scheme for the takeover of the crisis-hit bank by the Delhi-based Unity Small Finance Bank (USFB) is in process

The restrictions on Punjab and Maharashtra Cooperative (PMC) Bank has been extended for another three months till the end of March next year.

Reserve Bank of India (RBI) has extended the restrictions as further action on the draft scheme for the takeover of the crisis-hit bank by the Delhi-based Unity Small Finance Bank (USFB) is in process.

The central bank had prepared a draft scheme of amalgamation and the same was placed in the public domain on November 22 as part of seeking suggestions and objections, if any, from members, depositors and other creditors of PMC Bank and USFB. The deadline for submitting the comments was till December 10.

"Further action with regard to sanction of the scheme is under process," RBI said on Tuesday as it extended the restrictions for another three months till March 31, 2022, subject to review.

In September 2019, RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including a cap on withdrawals by its customers, after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL.

The restrictions have been extended several times since then. The directions were last extended in June this year and are in place till December 31.

The draft scheme of amalgamation envisages a takeover of the assets and liabilities of PMC Bank, including deposits, by USFB, thus giving a greater degree of protection for the depositors, RBI had said last month.

USFB, promoted by Centrum Financial Services along with Resilient Innovation Pvt Ltd as 'joint investor', was granted a banking licence in October 2021. USFB started functioning on November 1.