The Reserve Bank of India (RBI) has extended the timeline for restrictions on Punjab and Maharashtra Cooperative (PMC) Bank till 31 December 2021 after taking into account the prospective time required for the restructuring process of the bank.
The decision came a week after the RBI granted an “in principle” approval to Centrum Financial Services for setting up a small finance bank (SFB), thereby clearing the decks for the takeover of th crisis-hit PMC Bank by Centrum and BharatPe as equal partners.
In response to the Expression of Interest (EOI) dated 3 November 2020 floated by PMC Bank for its reconstruction, certain proposals were received. After careful consideration, the proposal from Centrum Financial Services Ltd (CFSL) along with Resilient Innovation Pvt Ltd (BharatPe) has been found to be prima facie feasible, said an RBI statement.
It added that in specific pursuance to their offer dated 1 February 2021 in response to the EOI, the central bank has granted “in-principle” approval, valid for 120 days, to CFSL to set up a small finance bank under the general guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector dated 5 December 2019.
“Taking into account the time required for the completion of various activities involved in the process, it is considered necessary to extend the aforesaid directions,” it said.
“Accordingly, it is hereby notified for the information of the public that the validity of the aforesaid directive dated 23 September 2019, as modified from time to time, has been extended for a further period from 1 July 2021 to 31 December 2021, subject to review,” it said.
PMC Bank, a Mumbai-headquartered multi-state urban cooperative bank, was placed under the All-Inclusive Directions under Sub-section (1) of Section 35-A read with Section 56 of the Banking Regulation Act, 1949 with effect from close of business on 23 September 2019, in the interest of depositor protection. The directions were last extended vide directive dated 26 March 2021 up to 30 June 2021.