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RBI extends restrictions on PMC Bank till March 31, 2022

RBI extends restrictions on PMC Bank till March 31, 2022

The RBI stated that further action with regard to sanction of the scheme of amalgamation of the bank with Unity Small Finance Bank is under process.

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

The Reserve Bank of India (RBI) on Tuesday extended the restrictions on Punjab and Maharashtra Cooperative Bank (PMC Bank) further from December 31, 2021 to March 31, 2022.

The RBI stated that further action with regard to sanction of the scheme of amalgamation of the bank with Unity Small Finance Bank is under process.

"The draft scheme was placed in public domain on November 22, 2021 inviting suggestions and objections, till December 10, 2021, from members, depositors and other creditors of transferor bank (PMC) and transferee bank (USFB) in terms of Section 45(6)(b) of the Act ibid. Further action with regard to sanction of the scheme is under process," RBI said in a statement.

In November this year, the central bank had come out with a draft scheme for takeover of the crisis-hit bank by the Delhi-based Unity Small Finance Bank (USFB).

Also Read: RBI issues draft scheme for takeover of PMC Bank by Unity Small Finance Bank

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

In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including capping withdrawals by its customers, after detection of certain financial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.

Also Read: Centrum-BharatPe's Unity Small Finance Bank commences operations

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