‘Investor response to PMC Bank resolution positive’

Potential investors’ response to the Expression of Interest (EoI) floated by the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank for investment/ equity participation for reconstructing the bank looks positive at this point of time, according to Reserve Bank of India (RBI) Governor Shaktikanta Das.

To a specific question as to why YES Bank and Lakshmi Vilas Bank could be resolved quickly but not PMC Bank, Das said the situation in PMC Bank was completely different.

“The last date for submission of EoI is December 15. Let us see what is the response and after that we can take a view on this,” said the Governor.

The bank, and its management, are engaged with investors who have purchased the information memorandum, he added.

As per the EoI, the bank wants to identify a suitable equity investor/ group of investors willing to take over management control so as to revive the bank and commence regular day-to-day operations.

Subsequent to commencement of the normal day-to-day operations, it will be open for the investor(s) to convert the bank into a Small Finance Bank by making an application to Reserve Bank of India, subject to compliance of the RBI guidelines on Voluntary Transition of Primary (Urban) Co-operative Banks (UCBs) into Small Finance Banks (SFBs), it added.

PMC Bank was placed under RBI Directions from the close of business of the bank on September 23, 2019, due to a huge fraud perpetrated by the promoter of a real estate group and some bank officials.

Deposit withdrawals have been capped at ₹1 lakh per depositor for the entire period of the Direction, which is valid up to December 22, 2020.

The bank’s depositors, especially senior citizens who were depending on interest income, are facing a lot of hardship due to inability to access funds.