The proposed merger of Punjab and Maharashtra Cooperative Bank (PMC) with Unity Small Finance Bank (USFB) has received government approval.
The government has notified amalgamation of Punjab & Maharashtra Co-operative Bank Ltd (PMC Bank) with Unity Small Finance Bank Ltd (USFBL).
All the branches of PMC Bank will function as branches of USFBL from today.
''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,'' the RBI said.
The Reserve Bank of India (RBI) extended the restrictions on Punjab and Maharashtra Cooperative (PMC) Bank for another three months till the end of March, 2022.
The draft scheme of amalgamation is required to be placed before the government for its sanction, as per the Banking Regulation Act.
RBI had prepared a draft scheme of amalgamation and the same was placed in the public domain on November 22.
USFBL is making necessary arrangements to implement the provisions of the scheme, it added.
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In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including cap on withdrawals by its customers, after detection of certain financial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 have been extended several times 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.
