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PMC Bank Branches To Run As Unity Small Finance Bank Entities

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All branches of PMC Bank will now work as branches of Unity Small Finance BankMumbai: In a relief for tense depositors, all branches of the crisis-hit PMC Bank will now operate as the branches of the Unity Small Financing Bank Ltd (USFBL) with the conclusion of the takeover that likewise marks completion of a more than two-year long RBI-led revival process.With the Union federal government informing the scheme of amalgamation of the Punjab and Maharashtra Cooperative Bank (PMC Bank) and the USFBL with impact from January 25, the bank's depositors can now withdraw their money in a phased way or continue to have their accounts with the brand-new entity.In a not-so-common regulatory move, the RBI, in September 2019, superseded the board of the PMC Bank and imposed numerous constraints, consisting of topping withdrawals by customers, after monetary irregularities at the loan provider emerged.

The amalgamation will enter force with effect from the date of the notification of the plan i.e.

January 25, 2022.

All the branches of the PMC Bank will work as branches of the USFBL with result from this date, the Reserve Bank of India (RBI) stated in a release.The central bank also said the USFBL is making required plans to carry out the arrangements of the scheme, which envisages takeover of the assets and liabilities of PMC Bank, including deposits, based on regards to the arrangements of the scheme.USFBL, promoted by Centrum Financial Solutions in addition to Resilient Innovation Pvt Ltd as a 'joint investor', was granted a banking licence in October 2021.

USFBL started working on November 1.

The PMC Bank had 137 branches throughout six states when the RBI superseded the bank's board in September 2019.

Out of the 137 branches, 103 were in Maharashtra.In respect of every cost savings bank account or bank account or any other bank account with the PMC Bank, the USFBL will open with itself a matching and comparable account in the name of the particular holder.

It will also credit thereto full amount, consisting of interest accumulated till March 31, 2021, as per the scheme of amalgamation notified by the Department of Financial Providers under the Ministry of Finance.Initially, the insurance coverage cash received from the DICGC will be paid to all qualified depositors subject to a ceiling of Rs 5 lakh.Thereafter the retail depositors will be permitted to withdraw additional amounts in a phased way.

They can withdraw Rs 50,000 at the end of very first year from the selected date of the plan of amalgamation (January 25, 2022) and as much as Rs 50,000 at the end of the second year.The depositors can withdraw as much as Rs 1 lakh completion of three years, Rs 2.5 lakh at the end of four years and Rs 5.5 lakh at the end of five years.

They can withdraw their whole amount from the bank after 10 years.All staff members of the PMC Bank will continue in service on the same remuneration and conditions of service for a duration of three years from the selected date of the scheme of amalgamation.The USFBL will have the option of merging branches of the PMC Bank according to its convenience and can likewise shut down or shift the existing branches according to the extant directions issued by the RBI.In November last year when the RBI had actually floated the draft scheme of amalgamation, USFBL had actually stated the draft scheme offers much needed relief and clearness to over 1,100 PMC Bank employees, who will remain employed and continue continuous service to clients .

The promoters of USFBL in addition to the joint investor have instilled a capital of Rs 1,105.10 crore in USFBL as on November 1, 2021.

Further, equity warrants of Rs 1,900 crore, to be exercised anytime within an overall period of 8 years by the holders thereof, was issued by USFBL on November 1, 2021 to the promoters to bring more capital.The RBI had superseded the PMC Bank's board after detection of particular monetary abnormalities, hiding and misreporting of loans provided to property designer HDIL.

The bank's exposure to HDIL was over Rs 6,500 crore or 73 percent of its total loan book size of Rs 8,880 crore as on September 19, 2019.




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