Punjab and Maharashtra Co-operative (PMC) Bank has invited expressions of interest (EoI) from interested investors. The exercise is meant to find equity investors willing to take over its management in order to revive the beleaguered lender and resume its day-to-day operations.
Once normal day-to-day operations begin, the investors can convert PMC Bank to a small finance bank by submitting a proposal to the Reserve Bank of India in this regard. Upon meeting prescribed eligibility functions, a small finance bank can transform into a universal bank after a minimum period of five years, PMC Bank further noted in an advertisement posted on Tuesday.
Listing the eligibility criteria for prospective investors, PMC Bank said that financial institutions, including banks and NBFCs, and individuals or group of individuals, companies, societies, trusts or any other such entities with adequate net worth can furnish EoIs to take over the bank.
"The investor(s) should ideally bring in the capital required for enabling the bank to achieve the minimum required capital to risk weighted assets ratio (CRAR) of 9 per cent. However, the investors may explore the option of restructuring a part of deposit liabilities into capital/capital instruments," PMC Bank said in its advertisement.
The co-operative bank said that it may approach RBI's Deposit Insurance and Credit Guarantee Corporation (DICGC) seeking support for paying up to Rs 5 lakh to depositors.
"After due evaluation, the viable proposal(s) will be forwarded to Reserve Bank for its consideration for preparing a draft scheme of reconstruction and other consequential action under Section 45 of Banking Regulation Act, 1945," it further added.
Interested investors may request for a detailed Information Memorandum (IM) on payment of Rs 15,000 by November 20, 2020. The requests should be accompanied by the payment details, a duly executed non-disclosure agreement and the required investor details, like name, address, contact details, present line of activity, financial position, etc., PMC Bank said.
Investors may seek pre-bid clarifications till November 30, 2020. The last date for submitting bids is December 15, 2020.
PMC Bank was placed under directions by the RBI on September 29, 2019, after the central bank discovered that the lender allegedly created fictitious accounts to hide over Rs 6,700 crore in loans extended to the almost-bankrupt Housing Development Infrastructure Ltd (HDIL). The urban co-operative bank and the RBI have been exploring avenues for its resolution and recovery of bad loans.