RBI extends restrictions on PMC Bank till 31 March, says it received four investment proposals

Mumbai: Punjab and Maharashtra Cooperative (PMC) Bank has received four investment proposals, the RBI said on Friday while extending the restrictions imposed on the crisis-hit lender to 31 March to enable it to finalise the reconstruction plan. In September 2019, the RBI had imposed restrictions on the fraud-hit multi-state urban cooperative bank, including on withdrawals by customers, following a scam. Depositors had held several protests demanding their money back. Last month, PMC had invited expression of interest (EoI) from potential investors for investment or equity participation in the bank for its reconstruction. The last date for submission of EoIs by potential investors was kept as 15 December. “The bank has informed Reserve Bank that in response to EoI, four proposals have been received. These proposals will be examined by the bank with regard to their viability and feasibility taking into account the best interest of the depositors. To undertake this process, the bank would need some more time,” the RBI said. The RBI further said keeping in view the best interest of all stakeholders, it is 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 December 23, 2020 to March 31, 2021, subject to review,” it said. On 23 September, 2019, the RBI had superseded the board of PMC and placed it under various regulatory restrictions after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL. Its exposure to HDIL was over Rs 6,500 crore or 73 percent of its total loan book size of Rs 8,880 crore as of 19 September, 2019. Initially, the RBI had allowed depositors to withdraw Rs 1,000 which was later raised to Rs 1 lakh per account to mitigate their difficulties. In June this year, the RBI had extended the regulatory restrictions on the cooperative bank by another six months till 22 December, 2020. As of 31 March, 2020, PMC Bank’s total deposits stood at Rs 10,727.12 crore and total advances at Rs 4,472.78 crore. Gross NPA of the bank stood at Rs 3,518.89 crore as on end-March. The share capital of the bank is Rs 292.94 crore. During 2019-20, it registered a net loss of Rs 6,835 crore and has a negative net worth of Rs 5,850.61 crore.