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Hope for troubled PMC Bank as 4 entities show interest in acquiring it

PMC Bank, put under restrictions in September 2019, had invited expressions of interest in November, and 4 entities — financial sector players and corporates — have come forward.

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Mumbai: Four entities have shown interest in acquiring troubled lender Punjab and Maharashtra Cooperative Bank, paving the way for a resolution that could end the misery of lakhs of depositors, which began when it was put under restrictions in September last year.

In November this year, PMC Bank invited expression of interest (EoI) from entities to take over, with the deadline for submitting the EoIs ending Tuesday evening.

“Four entities have submitted the expression of interest. Now the applications will be scrutinised,” said a source aware of the developments.

The applicants are a combination of financial sector players and corporate entities, and sources said these entities should meet the Reserve Bank of India’s fit and proper criteria.

Potential investors will have the option to convert PMC Bank into a small finance bank, provided they meet the RBI’s licencing conditions. The lender will need RBI’s approval for such a conversion.


Also read: How PMC Bank hid its bad loans and duped RBI for years


How much investment is required for revival

PMC Bank, a multi-state cooperative lender, has a presence in Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh, with 137 branches.

It was put under restrictions by the RBI in September 2019 following irregularities that impacted its financial health. Initially, deposit withdrawal was capped at Rs 1,000, which has been raised to Rs 1 lakh now.

The bank’s net worth is negative, and it will need around Rs 5,850 crore to bring it back to zero, and another Rs 1,000 crore to maintain a minimum capital adequacy ratio of 9 per cent and start the business.

In effect, the new investor needs to put in around Rs 7,000 crore to revive PMC Bank.


Also read: Net worth wiped out, withdrawal restrictions, no resolution — PMC Bank’s worse off 1 year on


 

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3 COMMENTS

  1. Request ministry of Finance and RBI to extend all possible help to solve the burning problem of innocent depositors sympathy cally for their servival

  2. Please release depositor’s deposits. I lost my job because of covid. Even my husband jobless. Nobody there to look after. Please do the needful.

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