New Delhi: The Reserve Bank of India (RBI) has extended the restrictions on Punjab and Maharashtra Co-operative Bank (PMC Bank) surrounded by allegations of scam and facing financial crisis till 31 March. The central bank said that the validity of the instructions issued on 23 September 2019, which have been revised from time to time, is being extended from December 23, 2020, to March 31, 2021. However, good news for the bank is that 4 expressions of interest (EoI) have been received so far for its reconstruction and equity investment.
Significantly, last month PMC Bank had sought a Letter of Interest (EOI) from potential investors for its restructuring through investment or equity participation. The last date for submission of this EOIs was 15 December. Which 4 investors have also shown interest. However, RBI has not yet revealed which companies or investors have deposited EoI to buy a stake in PMC Bank. The bank will study the feasibility of these offers keeping in mind the interests of the depositors and selected companies and investors will be included in the bidding process to buy the bank.
Know what is the whole matter
PMC Bank had illegally loaned Rs 6500 crore to the HDIL group, which was 73% of the bank’s total loan book size of Rs 8880 crore in September 2019. The bank had a deposit base of Rs 11,617 crore in March 2019. After the scam was exposed, former Mumbai Bank MD Joy Thomas and former chairman Varyam Singh were arrested by the Economic Offenses Wing of Mumbai in October last year. Apart from these, many other senior officers of the bank were arrested.
RBI disbanded the PMC board
The bank hid many financial irregularities and lending to real estate developer HDIL. Due to which the RBI dissolved the board of PMC on 23 September last year and imposed various restrictions including withdrawal of money from the bank. Explain that initially the RBI allowed depositors to withdraw Rs 1000, which was later increased to Rs 1 lakh in June 2020. The Reserve Bank had said that all restrictions will remain in force on PMC till December 22, 2020.
The case of fraud in PMC bank was revealed in September 2019
The RBI said that all stakeholders (Stakeholders) were being negotiated to get the bank out of this situation, but the entire process has been hampered due to COVID-19 and the current uncertain environment. Apart from this, it has become challenging for the bank to raise any proposal due to the continuous decrease in net worth and the legal process in debt recovery. Let us know that the case of Fraud in PMC Bank came out in September 2019.
