Presenting Partner

Life Insurance Corporation of India

Moneycontrol

Budget 2022

Associate Partners:

  • Kotak Mutual Fund
  • Pharmeasy
  • Indiabulls
  • SBI

Presenting Partner

Life Insurance Corporation of India

Moneycontrol

Budget 2022

Technology Partner

Dell Technologies

Associate Partners

Kotak Mutual Fund
Pharmeasy
Indiabulls
SBI
UPCOMING EVENT:Are you 45+? Planning for retirement? We have just the right webinar for you - Planning for Retirement with Life Insurance on 27-Jan, 3pm. Register now!
you are here: HomeNewsBusiness

RBI extends Directions imposed on PMC Bank till December 31

RBI recently gave in-principle nod to Centrum Group to set up a small finance bank to acquire crisis-ridden PMC Bank.

June 25, 2021 / 05:45 PM IST

The Reserve Bank of India (RBI) on 25 June said it has extended the directions earlier imposed on Punjab and Maharashtra Co-operative Bank (PMC Bank) till December 31.

"Taking into account the time required for completion of various activities involved in the process, it is considered necessary to extend the aforesaid Directions," said the RBI in a release.

"Accordingly, it is hereby notified for the information of the public that the validity of the aforesaid Directive dated September 23, 2019, as modified from time to time, has been extended for a further period from July 1, 2021 to December 31, 2021, subject to review," the RBI said.

RBI recently gave in-principle nod to Centrum Group to set up a small finance bank to acquire crisis-ridden PMC Bank.

PMC Bank was placed by RBI under directions under Sub-section (1) of Section 35-A read with Section 56 of the Banking Regulation Act, 1949 with effect from close of business on September 23, 2019 in the interest of depositor protection. The directions were last extended vide Directive dated March 26, 2021 up to June 30, 2021.

Close

The RBI’s in-principle nod for Centrum to set up an SFB along with BharatPe is valid for 120 days. Post this, the new entity will merge the PMC Bank with itself.

According to the details of the proposal by the bank, the investor should bring in the capital required for enabling the bank to achieve the minimum required capital to risk weighted assets ratio (CRAR) of 9 percent.

As on March 31, 2020, PMC Bank had total deposits of Rs 10,727.12 crore, total advances of Rs 4,472.78 crore and gross NPA of Rs 3,518.89 crore. The share capital of the bank is Rs 292.94 crore. The bank registered a net loss of Rs 6,835 crore during 2019-20 and has a negative net worth of Rs 5,850.61 crore.

The RBI superseded PMC Bank board in September 2019. About 70 percent of its total loan book of Rs 8,383 crore as on March 31, 2019, had been taken by real estate firm HDIL. The bank had Rs 11,600 crore in deposits. The police arrested Joy Thomas, former managing director of the PMC Bank, in October. The investigators have since made a few more arrests.

During investigations, it was found that the bank had been allegedly running fraudulent transactions for several years to facilitate lending to HDIL through fictitious accounts and violating single-party lending rules. The RBI imposed restrictions on deposit withdrawals and superseded its board after the fraud was detected.
Moneycontrol News
Tags: #RBI
first published: Jun 25, 2021 05:20 pm
Sections
ISO 27001 - BSI Assurance Mark