The cooperative body NCUI hailed the RBI’s main sign at Centrum Financial Services for the PMC Bank buyout, but said all depositors should get their deposits back unconditionally.
Paving the way for the takeover of the crisis Punjab and the Maharashtra Cooperative Bank (PMC), the Reserve Bank of India on Friday granted Centrum Financial Services its approval in principle to create a small financing bank.
Centrum Financial Services was one of the candidates for the takeover of PMC Bank.
Reacting to the RBI’s approval in principle to Centrum Financial Services, NCUI Chairman Dileep Sanghani said in a statement: âThis is indeed welcome. However, care must be taken to ensure that all depositors collect their deposits. deposits without any conditions “.
However, he said that it would have been better if all the big UCBs had raised the funds together to revive the bank. National Federation of Urban Co-operative Banks and Credit Companies Ltd (NAFCUB) President Jyotindra Mehta said: âThis is in line with the wishes of the sector and depositors. This will undoubtedly strengthen the image of the sector.
However, the culprits who committed the fraud in the bank must be punished. GH Amin, Chairman of the Cooperative Bank of India and Chairman of the Gujarat State Cooperative Union welcomed this decision.
“It is a good gesture, to take over a bank in crisis with a small financing bank, and to relaunch it. Depositors will have the assurance of recovering their deposits.”
National Federation of State Cooperative Banks (NAFSCOB) Director General Bhima Subrahmanyam said: “This decision is indeed appreciable. However, all depositors should collect their deposits unconditionally.”
The large urban cooperative banks should have taken over PMC Bank and created a small financing bank, because PMC had a great image before the fraud happened, he added.
Subrahmanyam is also president of the International Cooperative Banking Association.
On Friday, the RBI approved in principle Centrum Financial Services Limited’s offer of February 1, 2021 for the takeover of PMC Bank Ltd.
PMC Bank had invited eligible investors to express their interest in an investment / equity investment for its reconstruction and had received four proposals.
In September 2019, the RBI replaced the board of directors of PMC and subjected it to regulatory restrictions, including a cap on withdrawals by its clients, after detection of certain financial irregularities, concealment and false declaration of loans granted to the promoter. HDIL real estate.
The restrictions have been extended several times since then. PMC’s HDIL exhibition was over â¹6,500 crore or 73 percent of the total size of its loan portfolio of â¹8,880 crores as of September 19, 2019.
Initially, the RBI allowed depositors to withdraw â¹1,000, which was later increased to â¹1 lakh per account to alleviate their difficulties.
In June 2020, the RBI extended regulatory restrictions on the cooperative bank by six months until December 22, 2020.
As of March 31, 2020, PMC Bank’s total deposits amounted to â¹10,727.12 crore and total advances to â¹4,472.78 crores. The bank’s gross non-performing assets amounted to â¹3,518.89 crore at the end of March 2020.
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