Money & Banking

PMC Depositors’ body to approach RBI seeking merger with a public sector bank

Rahul Wadke Mumbai | Updated on October 17, 2019

PMC needs to be saved because funds of cooperative credit societies are also deposited in the bank, said Vishwas Utagi.

The depositors' association of the scam ridden Punjab and Maharashtra Cooperative (PMC) Bank could soon approach the RBI seeking a merger of the bank with a large public sector bank, said Vishwas Utagi, President of the PMC Depositors’ Association on Wednesday.

Utagi, interacting with BusinessLine on the sidelines of a meeting of credit societies who have deposited large sums of money in the bank, said that the Centre had recently merged seven banks, which were carrying a lot of NPAs with SBI,

A similar process should be followed for PMC. The assets of the bank in the form of well-performing branches and good accounts will help in the merger. Bad assets could be liquidated, he said.

Utagi said that this week an appointment has been sought with RBI officials for reviving the bank and protecting the deposits of the credit societies, who had to mandatorily deposits a part of their funds with the bank. About 1,100 such institutional depositors are in the bank. Therefore PMC Depositors’ Association will seek direction from RBI and also from the courts so as to protect the interest of such depositors,

PMC needs to be saved because funds of cooperative credit societies are also deposited in the bank. Otherwise, there would be massive collateral damage in society, he said.

Utagi who has been a veteran banking trade union leader, pointed out that the bank was founded in Sion-Koliwada, which is a predominately Sikh area of Mumbai in 1984. Today the Sikh community is very disturbed because their prestige, which is the name Punjab is associated with the bank. There is also a talk in the community that with the help of the funds from all other Gurudwaras, in the form of capital infusion and support of Akal Takht (Highest spiritual body), the bank could be revived.

The Sikh community has a lot of money deposited in this bank, out Rs 11,600 crore deposits most of the institutional depositors are from schools, hospitals, and Gurudwaras of the community, “Why should the whole community in Mumbai suffer because of a few black sheep. The depositors in March 2019 saw the A-grade balance sheet of the bank, which was certified by RBI and therefore they chose to park their money in PMC,” he said.

Published on October 17, 2019

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