Money & Banking

PMC Bank to close down 15 branches in Mumbai

Mumbai | Updated on October 20, 2020

Scam-hit Punjab and Maharashtra Co-operative (PMC) Bank has decided to close down 15 branches in the Mumbai Metropolitan Region (MMR) and shift their business to nine other branches in a bid to save on rental outgo and other operating expenses.

This consolidation of branches comes in the wake of PMC Bank deciding to shift its main branch located at Bhandup Station Road (West) to another branch in the same suburb late last month.

PMC Bank also plansto sell its owned assets in Palghar and Nanded branches (both in Maharashtra).

The bank has come to grief as its high exposure to real estate company HDIL turned non-performing. The central bank has red-flagged the fraud/ financial irregularities in the bank and manipulation of its books of accounts.

The bank’s attempt to sell two aircraft – Dassault Falcon 2000 and Bombardier Challenger, and a Ferreti Yacht 881 belonging to HDIL Group, as part of its recovery efforts – have not yielded any results so far.

As per its 2018-19 annual report, PMC Bank had a network of 137 branches spread across seven States – Maharashtra (103 branches), Goa and Delhi (6 branches each), Gujarat (5), Madhya Pradesh (2) and Karnataka (15).

Curtail expenditure

Ever since PMC Bank was put under Directions by the Reserve Bank of India (RBI) with effect from the close of its business on September 23, 2019, harried depositors have been demanding that the bank curtail its expenditure.

“It has taken a year for the bank to realise that they need to cut down on operating expenses.

“The bank’s new Administrator, AK Dixit, is an experienced commercial banker as well as an insolvency professional. So, his experience should help in resolving the knotty bad loans problem in the bank,”said Chander Purswani, President, PMC Depositors Forum.

The Forum has approached PMC Bank’s Administrator with a proposal to get their bank merged with either a public sector bank (PSB) or a strong private sector bank to get access to their hard-earned money.

Options for resolution

While the Administrator of PMC Bank and the RBI have been exploring various options for resolution of the bank, several factors such as huge losses incurred by the bank resulting in its entire net worth getting wiped out, steep erosion in deposits, continue to pose serious challenges in finding a workable plan for revival of the bank, said the central bankin a statement issued on September 22.

The bank has also been making efforts for recovery of non-performing assets, although the progress has been constrained because of the pandemic and legal complexities, it added.

“Nevertheless, in the interest of depositors, PMC bank and the RBI are continuing to engage with the stakeholders to explore the possibility of finding a viable and workable solution for the resolution of the bank,” the RBI emphasised.

Published on October 20, 2020

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like