Punjab and Maharashtra Co-operative Bank (PMC) is currently inviting bids or an expression of interest from investors to take control of the management of the bank and handle the day-to-day operations of the institution.
The bank said on its website that other financial institutions, individuals, societies, companies, trusts etc can be eligible to become investors in PMC. However, the bank has not disclosed the financial prerequisites for potential investors. Those eligible have until the 15th of December to put in their bids, the bank added.
Also read - RBI Appoints AK Dixit As New Administrator Of PMC To Find Viable Solution
“The investor(s) should ideally bring in the capital required for enabling the bank to achieve the minimum required capital to risk-weighted assets ratio (CRAR) of 9%. However, the investors may explore the option of restructuring a part of deposit liabilities into capital/capital instruments. The bank may also approach DICGC for its support for payment up to ₹5,00,000 (Rupees Five lakh only) (insured deposits) to depositors,” PMC’s notice read.
PMC Bank was put under the control of the (RBI) since September 2019 after it was revealed that the bank’s management had offered disproportionate amount of loans to the HDIL Group without mentioning it in the books. Needless to say, these loans subsequently turned into NPAs or non-performing assets.
As per the figures released on PMC Bank’s website in March 2020, it had NPAs of ₹3,519 crores, total advances of ₹4,473 crores whereas the total deposits were valued at ₹10,727 crores. Further, the share capital of the institution was said to be ₹293 crores. PMC Bank currently has a negative net worth of ₹5851 crores whereas it registered a net loss of ₹6,835 crores for the 2019-20 period.
Read - PMC Bank Depositors Will Have To Pay Interest On Deposits Despite Having No Access To Their Money
AK Dixit was appointed as the administrator of PMC Bank by the RBI on September 23, 2020. In a letter to the bank’s customers, Dixit said, “We are working on finding a way out to resolve the bank in the best interests of all stakeholders, particularly the depositors. Various models/ options are being considered, and discussions are continuing with different entities in this regard. Inspite of the pandemic-induced hurdles, the matter is engaging our close attention under the guidance of RBI.”
It is worth pointing out that the bank has started the process of recovering bad debts via close follow-ups, settlements as well as legal litigations wherever applicable. Dixit also assured the customers that the bank is looking to cut expenses by selling additional space, rationalizing telecom lines, and by reducing branches among other measures.
Also read - PMC Bank Scam: One Year Since The Sanctions; Here's What Happened
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