The Reserve Bank of India has placed in public domain a draft scheme for the acquisition of Punjab and Maharashtra Cooperative (PMC) Bank by Delhi-based Unity Small Finance Bank (USFB).

USFB has commenced operations with effect from November 1, 2021.

Mumbai-based PMC Bank, a Multi-State Urban Cooperative Bank, was placed under All-Inclusive Directions under the Banking Regulation Act, 1949 with effect from close of business on September 23, 2019, on account of fraud which led to steep deterioration in the net-worth of the bank.

The draft scheme of amalgamation envisages takeover of the assets and liabilities of PMC Bank including deposits, by the USFB in terms of the provisions of the scheme giving a greater degree of protection for the depositors. It may be seen that USFB is being set up with capital of about ₹1,100 crore as against regulatory requirement of ₹200 crore for setting up of a Small Finance bank under the Guidelines for on-tap licensing of Small Finance bank in Private Sector dated December 5, 2019, with provision for further infusion of capital at a future date after amalgamation.

The Reserve Bank invites suggestions and objections, if any, from members, depositors and other creditors of transferor bank (PMC) and transferee bank (USFB), on the draft scheme.

The draft scheme has also been sent to transferor bank and transferee bank for their suggestions and objections. The suggestions and objections will be received by Reserve Bank up to 5.00 PM on December 10, 2021. The Reserve Bank will take a final view thereafter.