Scam-hit PMC Bank invites EoI from potential investors
Objective of the process of invitation of EoI is to identify a suitable equity investor/ group of investors willing to take over management control so as to revive the bank and commence regular day-to-day operations
Mumbai: Fraud-hit Punjab and Maharashtra Cooperative (PMC) Bank on Tuesday invited expression of interest (EoI) from potential investors for investment or equity participation in the bank for its reconstruction.
“Objective of the process of invitation of EoI is to identify a suitable equity investor/ group of investors willing to take over management control so as to revive the bank and commence regular day-to-day operations,” PMC Bank said in an advertisement.
Subsequent to commencement of the normal day-to-day operations, it will be open for the investors to convert the bank into a small finance bank by making an application to the RBI, the lender said. The conversion will be subject to compliance of the RBI guidelines on Voluntary Transition of Primary (Urban) Co-operative Banks (UCBs) into Small Finance Banks (SFBs) dated September 27, 2018, it said.
In September, 2019, the Reserve Bank of India had superseded the board of the multi-state urban cooperative bank and placed it under various regulatory restrictions after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL. It’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 this year, the RBI had extended the regulatory restrictions on the cooperative bank by another six months till December 22, 2020.
As of March 31, 2020, the PMC Bank’s total deposits stood at Rs 10,727.12 crore and total advances at Rs 4,472.78 crore. Gross NPA of the bank stood at Rs 3,518.89 crore as of end-March. The share capital of the bank is Rs 292.94 crore. During 2019-20, it registered a net loss of Rs 6,835 crore and has a negative net worth of Rs 5,850.61 crore.
