The bank had issued an expression of interest (EoI) on November 3, 2020, inviting investors for a revival or reconstruction of PMC Bank. The administrator for Punjab & Maharashtra Co-operative (PMC) Bank has set February 1 as the deadline for prospective investors to submit final offers for the reconstruction of the bank. The due diligence process is currently being carried out by three interested parties, administrator AK Dixit told the bank’s depositors in a letter.
The bank had issued an expression of interest (EoI) on November 3, 2020, inviting investors for a revival or reconstruction of PMC Bank. Initially, four investors had shown interest. Further process has been undertaken by three of them. “The investors need to have a full understanding of the financial position of the Bank before giving their final offer. Accordingly, they are at various stages of conducting detailed due diligence. The investors have been allowed time till 01.02.2021 for submission of their final offer,” the letter said.
The bid document put out by the administrator AK Dixit said that the objective of the process of invitation of EoIs is to identify a suitable equity investor or group of investors willing to take over management control so as to revive the bank and commence regular day-to-day operations.
“Subsequent to commencement of the normal day-to-day operations, it will be open for the investor(s) to convert the bank into a small finance bank by making an application to Reserve Bank of India 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,” the document said.
According to news reports, UK-based Liberty Group, a combine of the Centrum group and BharatPe, and two business families from Mumbai and Hyderabad had expressed interest in taking over the bank.
The initial EoI said that an investor 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%. They may also explore the option of restructuring a part of deposit liabilities into capital or capital instruments. The bank may approach the Deposit Insurance and Credit Guarantee Corporation (DICGC) for its support to pay up to Rs 5 lakh to depositors. After evaluation, viable proposals will be forwarded to the Reserve Bank of India (RBI) for its consideration for preparing a draft scheme of reconstruction and other consequential action under Section 45 of Banking Regulation Act, 1945.
The bank had total deposits of Rs 10,727.12 crore, total advances of Rs 4,472.78 crore and gross non performing assets (NPAs) worth Rs 3,518.89 crore as on March 31, 2020.The share capital of the bank is Rs 292.94 crore. It registered a net loss of Rs 6,835 crore during FY20 and has a negative net worth of Rs 5,850.61 crore.
This article is auto-generated by Algorithm Source: www.financialexpress.com
