RBI extends restrictions imposed on PMC Bank until March 31

RBI had imposed restrictions on the withdrawal of deposits from PMC Bank.

The Reserve Bank of India (RBI) on December 28 extended the validity period of its directions imposed on Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) from January 1, 2022, to March 31, 2022.

Earlier, the RBI had issued a draft scheme for amalgamation of the bank on November 22, 2021, inviting suggestions and objections, till December 10, 2021, from members, depositors and other creditors of PMC Bank and Unity Small Finance Bank. Under the scheme, Unity SFB is set to take over PMC Bank.

Further action with regard to the sanction of the scheme is under process. "It is, therefore, considered necessary to extend the aforesaid Directions. 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 January 1, 2022 to March 31, 2022, subject to review.," the RBI said.

The RBI had taken over the board of PMC Bank in September 2019 after finding major financial irregularities in the bank.

As per the draft scheme details, the acquiring bank (Unity SFB) will pay the amount guaranteed by DICGC (Deposit Insurance and Credit Guarantee Corporation) i.e. up to Rs 5 lakh to depositors.

For the remaining amount, the bank will pay up to Rs 50,000 above the payment already made at the end of two years, at the end of three years an amount of up to Rs one lakh will be paid, at the end of four years up to Rs 3 lakh and at the end of five years, Rs 5.5 lakh and the entire remaining amount will be paid after 10 years, on demand.