RBI announces Draft Scheme of Amalgamation for PMC Bank

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Mumbai : The Reserve Bank of India (RBI) has today placed in public domain a draft scheme of amalgamation of The Punjab and Maharashtra Cooperative (PMC) Bank with Unity Small Finance Bank Ltd. (USFB), a banking company incorporated in India under Companies Act, 2013, and having its Registered Office in New Delhi.

 The draft scheme of amalgamation envisages takeover of the assets and liabilities of PMC Bank including deposits, by the USFB in terms of the provisions of the scheme giving a greater degree of protection for the depositors. It may be seen that USFB is being set up with capital of about ₹1,100 crore as against regulatory requirement of ₹200 crore for setting up of a Small Finance bank under the Guidelines for on-tap licensing of Small Finance bank in Private Sector dated December 5, 2019, with provision for further infusion of capital at a future date after amalgamation.

The Reserve Bank invites suggestions and objections, if any, from members, depositors and other creditors of transferor bank (PMC) and transferee bank (USFB), on the draft scheme, which may be sent to the address mentioned in the “Notice”. The draft scheme has also been sent to transferor bank and transferee bank for their suggestions and objections. The suggestions and objections will be received by Reserve Bank up to 5.00 PM on December 10, 2021. The Reserve Bank will take a final view thereafter.

As per the draft scheme, depositors with more than Rs.5 lakh will be repaid according to the following schedule.

the amount received from DICGC to all the eligible depositors of the transferor bank, which would be an amount equal to the balance in their deposit accounts or Rs.5,00,000 (Rupees five lakh only), whichever is less, in accordance with the rules of distribution of such amounts;

(II) at the end of two years from the appointed date, over and above the payment already made, an additional amount equal to the balance in their deposit account or Rs.50,000 (Rupees fifty thousand only), whichever is less, on demand only to the retail depositors of the transferor bank,

(III) at the end of three years from the appointed date, over and above the payments already made, an additional amount equal to the balance in their deposit account or Rs.1,00,000 (Rupees one lakh only), whichever is less, on demand only to the retail depositors of the transferor bank,

(IV) at the end of four years from the appointed date, over and above the payment already made, an additional amount upto the balance in their deposit account or Rs.3,00,000 (Rupees three lakh only), whichever is less, on demand only to the retail depositors of the transferor bank.

(V) at the end of five years from the appointed date, over and above the payment already made, an additional amount upto the balance in their deposit account or Rs.5,50,000 (Rupees five lakh fifty thousand only), whichever is less, on demand only to only the retail depositors of the transferor bank.

(VI) the entire remaining amount of deposits (after making payment as mentioned in clause (I), (II), (III), (IV) and (V) above in the accounts of the retail depositors of transferor bank after 10 years from the appointed date, on demand

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