The Finance Ministry has sanctioned and notified the amalgamation scheme of Punjab and Maharashtra Co-operative Bank (PMC Bank) with Unity Small Finance Bank Limited (Unity SF Bank). With this move, the ministry has protected the PMC Bank from liquidation and brought relief to its stakeholders.
According to government notification, issued on January 25, around 110 branches and over 1,100 employees of PMC Bank will now operate as Unity SF Bank, providing security and stability in their employment along with offering uninterrupted service to clients.
ALSO READ: Explainer: What ails the Bad Bank proposal unveiled in the last budget?
Further, as per the amalgamation scheme, the Unity SF Bank will repay the full principal amount due to all depositors. The Unity SF Bank will pay 90 percent of depositors -- having deposits up to Rs 5 lakhs -- as upfront. However, the depositors will have the option to either withdraw or retain this amount with Unity SF Bank or else they can make additional deposits, and take advantage of the attractive interest rate of up to 7%, being offered on savings accounts.
"Additionally, Institutional depositors will receive preference shares (80%) and equity share warrants (20%) in lieu of their eligible deposit balances. The warrants will be converted into equity shares at the time of the Bank’s IPO, giving them a potential equity upside," the Unity SF Bank said in a press release.
The Unity SF Bank also added that they have commenced operations on November 1, 2021, and their shareholders have committed capital of over Rs 3,000 crore through cash and warrants, which will be utilised to build a
strong foundation for the Bank, hire the right talent, and bring best in class technology to deliver a seamless digital banking experience.
