The Reserve Bank of India (RBI) announced on June 25 that it has prolonged the already enforced directives on PMC Bank (Punjab and Maharashtra Co-operative Bank) till December 31.
Keeping in mind the time required to complete the different actions involved in the process, the RBI stated in a statement that it is deemed essential to extend the aforementioned Directions.
“Accordingly, it is hereby notified for the information of the public that the validity of the aforesaid Directive dated September 23, 2019, as modified from time to time, has been extended for a further period from July 1, 2021 to December 31, 2021, subject to review,” the RBI stated.
Centrum Group has received an in-principle approval from the RBI to establish a small finance bank in order to buy the crisis-hit PMC Bank.
In the interest of depositor safety, the RBI put PMC Bank under instructions under Subsection (1) of Section 35-A read with Section 56 of the Banking Regulation Act, 1949, with effect from the close of business on September 23, 2019. The directives were last extended on March 26, 2021, until June 30, 2021.
The investor, according to the terms of the bank’s plan, should bring in the capital necessary to enable the bank to meet the minimum required capital to risk weighted assets ratio (CRAR) of 9 percent.
PMC Bank has total deposits of Rs 10,727.12 crore, total advances of Rs 4,472.78 crore, and gross NPA of Rs 3,518.89 crore as of March 31, 2020. The bank’s share capital is Rs 292.94 crore. During 2019-20, the bank lost Rs 6,835 crore and has a negative net value of Rs 5,850.61 crore.
In September 2019, the RBI took over the PMC Bank board. Real estate business HDIL had taken around 70% of its total loan book of Rs 8,383 crore as of March 31, 2019. Deposits at the bank totaled Rs 11,600 crore. Joy Thomas, the former managing director of PMC Bank, was detained by authorities in October. Since then, the investigators have made a few additional arrests.
During the course of the inquiry, it was discovered that the bank had allegedly been executing fraudulent transactions for several years in order to enable lending to HDIL through bogus accounts and in violation of single-party lending restrictions. After the scam was discovered, the RBI put limitations on deposit withdrawals and replaced its board.
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Hello, my name is Anuj Boruah. I am quite interested in writing about current events in business, finance, and the economy. I work as a newswriter at Reviewminute.