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RBI extends restrictions on scam-ridden PMC Bank till March 31

The Reserve Bank of India has extended the restrictions on the PMC bank till March 31 which had earlier been involved in a collision between the bank’s top officials and the Housing Development and Infrastructure Ltd.

RBI extends restrictions on scam-ridden PMC Bank till March 31
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The restrictions on the PMC bank were earlier extended by the Reserve Bank till March 31, 2021. This has increased the difficulties for investors. Last month, it had invited proposals from potential investors to restructure the bank through an equity partnership. The last date for submission of proposals was December 15. Four companies had earlier come forward to restructure the bank and invest equity in the bank.

In recent developments, Indian QR code-based payment app Bharat Pe and financial services company Centrum Group have reportedly submitted a joint expression of interest (EoI) to the Reserve Bank of India (RBI) in a bid to take over the troubled Punjab and Maharashtra Cooperative (PMC) Bank.

As per data provided in March 2020, PMC Bank had deposits of ₹10,727 crores, total advances of ₹4,473 crores, and gross non-performing assets (NPA) of ₹3,519 crores. Even though the bank had a share capital of ₹293 crores, it registered a net loss of ₹6,835 crores during the financial year that ended on March 2020. This was coupled with a negative net worth of ₹5,850 crores.

The Punjab and Maharashtra Co-operative Bank which was entwined in a huge scam involving collusion between the bank’s top officials and the Housing Development and Infrastructure Ltd. (HDIL) was taken over by the RBI exactly a year back. After the RBI had taken over the bank it was revealed that the bank had massively violated the RBI norms of exposure. Ever since the PMC crisis, over nine lakh depositors, mostly people who are senior citizens have been unable to fend for themselves. Moreover, at least 50 people have died due to anxiety and stress-related issues.

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