The loss suffered by Punjab & Maharashtra Co-operative (PMC) Bank is being thrust on its hapless depositors, going by the Reserve Bank of India’s draft scheme of amalgamation for merger of the Bank with Unity Small Finance Bank (USFB), according to Sahakar Bharati.

In its suggestions to the RBI on the aforementioned scheme, the all-India body of co-operative institutions said considering that PMC Bank depositors are in dire straits, the balances outstanding in their deposits should be returned as early as possible, but not later than five years from the appointed date of merger.

Further, the depositors should be paid interest at least equal to the average inflation rate per annum, but minimum 6 per cent till repayment. According to the RBI’s draft scheme of amalgamation, depositors (with balances over ₹5 lakh) will be paid their money over a stretched period of 2 to 10 years.

The scheme also envisages no interest payment on deposits in the first five years and 2.75 per cent interest on deposits that remain outstanding after five years.

Referring to the average inflation rate (CPI-combine) of 6.26 per cent during the last 10 years, Sahakar Bharati emphasised that this means the value of one rupee has depreciated by 6.26 per cent each over the last 10 years.

“If we consider that the same rate of inflation continues for the next 10 years, the value of one rupee will be NIL by the time the depositors get back their monies,” said Uday Joshi, National General Secretary, Sahakar Bharati.

Bonds option

Alternatively, Sahakar Bharati suggested that with the consent of depositors, a part or full of their deposits could be converted into bonds with maturity of maximum 7 years. The bonds should carry interest rate equal to deposit interest rate of State Bank of India or 10 years benchmark Government Security.

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