The resolution process for Punjab and Maharashtra Co-operative (PMC) Bank is at an advanced stage, Reserve Bank of India (RBI) deputy governor M Rajeshwar Rao said on Friday. In June, the central bank had given in-principle approval to a consortium set up by Centrum Financial Services and BharatPe to acquire the beleaguered co-operative bank.
“Centrum and its partner BharatPe have submitted their application for licence and is at an advanced stage of consideration. Once that final licence is approved, we will very shortly be proceeding ahead with the draft scheme and getting the requisite approvals,” Rao said, adding, “So, it is in an advanced stage.”
According to the terms of the approval, the Centrum-BharatPe consortium was to operationalise a small finance bank within 120 days. In June, Jaspal Bindra, executive chairman, Centrum Group, had said the RBI would prepare and submit the relevant notification only after the bank became operational. Under Section 45 of the Banking Regulation Act, the regulator can only take up a proposal for amalgamation of one bank with another bank, and not with a non-bank entity.
Once the draft scheme for amalgamation or reconstitution is ready, it is expected to be put in the public domain for comments. Thereafter, it will be notified through the gazette.
In September 2019, the RBI had superseded the board of directors of PMC Bank, placed it under an administrator and capped withdrawals from the bank amid allegations of surging defaults and financial misdemeanour. In response to a call for bids to take over the bank in November 2020, PMC Bank had received binding offers from certain investors. Eventually, the Centrum-BharatPe consortium received the regulator’s go-ahead in June this year.