RBI gives nod to Centrum Financial for PMC Bank takeover – Times of India


    NEW DELHI: The Reserve Bank of India (RBI) on Friday gave in-principle approval to Centrum Financial Services Limited to for takeover of crisis-hit Punjab and Maharashtra Co-operative (PMC) Bank via the small finance bank route.
    Centrum Financial Services was one of the applicants for takeover of the PMC Bank.
    The in-principle approval has been granted under general guidelines for on tap licensing of small finance banks in the private sector.
    “The RBI would consider granting a licence for commencement of banking business under section 22 (1) of the Banking Regulation Act, 1949, on being satisfied that the applicant has complied with the requisite conditions laid down by RBI as part of in-principle approval,” it said in an official statement.
    In September 2019, the central bank had put curbs on the PMC bank after finding financial irregularities such as under-reporting of bad loans.
    The RBI superseded its board and put a cap on withdrawals by its customers, after detection of hiden and mis-reporting of loans given to real estate developer HDIL. The restrictions have been extended several time since then.
    PMC’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.
    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 2020, the RBI had extended the regulatory restrictions on the cooperative bank by another six months till December 22, 2020.
    As of March 31, 2020, PMC Bank’s total deposits stood at Rs 10,727.12 crore and total advances at Rs 4,472.78 crore. Gross non-performance assets of the bank stood at Rs 3,518.89 crore at end-March, 2020.
    (With inputs from agencies)

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