USFBL, promoted by Centrum Financial Services along with Resilient Innovation Pvt Ltd as a ‘joint investor’, was granted a banking licence in October 2021. USFBL started functioning on November 1. The central bank also said the USFBL is making necessary arrangements to implement the provisions of the scheme, which envisages takeover of the assets and liabilities of PMC Bank, including deposits, as per terms of the provisions of the scheme. The PMC Bank had 137 branches across six states when the RBI superseded the bank’s board in September 2019. Out of the 137 branches, 103 were in Maharashtra.
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In a not-so-common regulatory move, the RBI, in September 2019, superseded the board of the PMC Bank and imposed various restrictions, including capping withdrawals by customers, after financial irregularities at the lender came to light. With the Union government notifying the scheme of amalgamation of the Punjab and Maharashtra Cooperative Bank (PMC Bank) and the USFBL with effect from January 25, the bank’s depositors can now withdraw their money in a phased manner or continue to have their accounts with the new entity.
“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 the USFBL with effect from this date,” the Reserve Bank of India (RBI) said in a release. In a relief for jittery depositors, all branches of the crisis-hit PMC Bank will now function as the branches of the Unity Small Finance Bank Ltd (USFBL) with the completion of the takeover that also marks the end of a more than two-year long RBI-led revival process.
The depositors can withdraw up to Rs 1 lakh the end of three years, Rs 2.5 lakh at the end of four years and Rs 5.5 lakh at the end of five years. They can withdraw their entire amount from the bank after 10 years. All employees of the PMC Bank will continue in service on the same remuneration and terms and conditions of service for a period of three years from the appointed date of the scheme of amalgamation. Thereafter the retail depositors will be permitted to withdraw additional amounts in a phased manner. They can withdraw Rs 50,000 at the end of first year from the appointed date of the scheme of amalgamation (January 25, 2022) and up to Rs 50,000 at the end of the second year.
Initially, the insurance money received from the DICGC will be paid to all eligible depositors subject to a ceiling of Rs 5 lakh. In respect of every savings bank account or current account or any other deposit account with the PMC Bank, the USFBL will open with itself a corresponding and similar account in the name of the respective holder. It will also credit thereto full amount, including interest accrued till March 31, 2021, as per the scheme of amalgamation notified by the Department of Financial Services under the Ministry of Finance.
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- PMC bank branches will function as Unity Small Finance banking entities
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