Govt Approves Merger of PMC Bank With Unity Small Finance Bank With Immediate Effect | Read Notification Here

Centre on Thursday announced that the branches of Punjab and Maharashtra Co-operative Bank will now operate as Unity Small Finance Bank branches from January 25, 2022.

New Delhi: The Modi government on Thursday announced that the branches of Punjab and Maharashtra Co-operative Bank will now operate as Unity Small Finance Bank branches from January 25, 2022. “The amalgamation will come into force with effect from the date of the notification of the scheme i.e. January 25, 2022. All the branches of the PMC Bank will function as branches of Unity Small Finance Bank Ltd. with effect from this date,” read the circular in the official site of the Reserve Bank of India.

“USFBL is making necessary arrangements to implement the provisions of the scheme. The Scheme of amalgamation notified today envisages takeover of the assets and liabilities of PMC Bank, including deposits, by the USFBL in terms of the provisions of the scheme. ” further read the readout.

A draft scheme of amalgamation, prepared by the RBI, was placed in the public domain on November 22, 2021 whereby suggestions and objections, if any, were sought from members, depositors and other creditors of the two lenders. The deadline for submission of suggestions and objections ended on December 10, 2021.

USFB, promoted by Centrum Financial Services along with Resilient Innovation Pvt Ltd as a ‘joint investor’, was granted a banking licence in October 2021. USFB started functioning on November 1.

In September 2019, the RBI superseded the then board of PMC Bank and placed it under regulatory restrictions, including cap on withdrawals by its customers, after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL. The restrictions were extended several time since then.

PMC Bank’s exposure to HDIL was over Rs 6,500 crore or 73 per cent of its total loan book size of Rs 8,880 crore as of September 19, 2019.