On Friday, the Reserve Bank of India extended restrictions on the ailing Punjab and the Maharashtra Cooperative Bank (PMC) for three months until March 31, 2021.
The RBI also said that four proposals have been received for the Expression of Interest (EoI) requested by the multi-state urban cooperative bank affected by fraud from potential investors for investment or equity participation in the bank for its reconstruction.
“These proposals will be examined by the bank with respect to their viability and feasibility taking into account the best interest of the depositors. To undertake this process, the bank would need a little more time,” RBI said.
The last date for the presentation of the EI by potential investors was December 15.
In September 2019, the Reserve Bank of India replaced the board of the multi-state urban cooperative bank and subjected it to various regulatory restrictions after detecting certain financial irregularities, hiding and erroneously reporting the loans made to real estate developer HDIL. Your exposure to HDIL ended ₹6.5 billion rupees or 73 percent of your total loan book size of ₹Rs 8,880 crore as of September 19, 2019. Initially, the RBI had allowed depositors to withdraw ₹1,000 which later rose to ₹1 lakh per account to mitigate your difficulties. In June this year, the RBI had extended regulatory restrictions on the cooperative bank for another six months until December 22, 2020. As of March 31, 2020, the total deposits of PMC Bank were ₹Rs 10,727.12 crore and total advances in ₹4,472.78 million rupees. The bank’s gross NPA stood at ₹3,518.89 crore at the end of March.
The capital stock of the bank is ₹292.94 crore. During 2019-20, it recorded a net loss of ₹6,835 crore and has a negative net worth of ₹5,850.61 million rupees. Based on the details of the proposal, eligible investors could be financial institutions, including banks and NBFC; and individuals or groups of individuals / companies, partnerships, trusts or any other entity that has an adequate network. “Ideally, investors should provide the necessary capital to allow the bank to achieve the minimum capital required for the risk-weighted asset ratio (CRAR) of 9%,” he said. However, investors may explore the option of restructuring a portion of the deposit liabilities into equity / equity instruments, the bank said.
The central bank appointed AK Dixit as the bank’s new manager in September this year.
With contributions from the agency
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