PMC Bank receives binding offer, but revival to take time, RBI says

Punjab and Maharshtra Cooperative (PMC) Bank has received binding offers from investors for its reconstruction, the Reserve Bank of India (RBI) on Friday said in an official communiqué. 

PMC Bank is under the watch of RBI and has been inoperative since September 2019, after the central bank discovered that the bank had created fictitious accounts to hide loans of more than Rs 6,500 crore extended to the almost-bankrupt HDIL. 

"RBI and PMC Bank are presently engaging with prospective investors in order to secure best possible terms for the depositors and other stakeholders while ensuring long term viability of the reconstructed entity," the central bank said in its statement. 

These binding offers are in response to Expression of Interest (EOI) that were floated by PMC in November 2020. "The resolution process of the PMC Bank is complex and is likely to take some more time," given the financial condition of PMC, the Central Bank said. Adding further it states, the process of reconstruction will be commenced as soon as the aforesaid objectives are achieved. 

Over 50 PMC bank depositors had lost their lives due to various reason after the scam came into the light. After discovering the fraud, the RBI had immediate put the minimum withdrawal limit of Rs 1000. 

The minimum withdrawal amount was later increased to Rs 10,000 followd by Rs 44,000 and eventually Rs 1 lakh. Over 70 per cent of the depositors were able to withdraw their money after the minimum limit was raised, Union Finance Minister Nirmala Sitharaman said in Lok Sabha in December 2019.