4 show interest in PMC's EoI; curbs to stay till March

In its EoI document, the bank had said it was open to converting into a small finance bank.

The Reserve Bank of India (RBI) on Friday extended restrictions on Punjab and Maharashtra Cooperative (PMC) Bank for another three months until March 31.

The bank meanwhile informed the RBI that it has received four proposals from investors in response to the expression of interest (EoI) it had invited for its revival.

“These proposals will be examined by the bank with regard to their viability and feasibility, taking into account the best interests of depositors.

"To undertake this process, the bank would need some more time,” the RBI said.

In its EoI document, the bank had said it was open to converting into a small finance bank (SFB).

It had also specified that the investor has to bring in enough capital for the bank to achieve the minimum required capital to risk weighted assets ratio (CRAR) of 9 per cent.

The last date for submitting EoIs was December 15.

Last year in September, the RBI superseded the board of the bank and placed restrictions on it after finding irregularities in certain loan accounts.

It was revealed that of the over Rs 8,000 crore of the bank’s advances, more than Rs 6,000 crore was its exposure to HDIL Group.

During investigations, it was found that the then management was concealing information from the board, auditors, and regulators, and replacing stressed accounts with dummy accounts.

While the bank almost relied solely on the company (HDIL) for growth, the real estate firm used the bank for its funding needs and to keep its accounts with other banks healthy.

Initially, deposit withdrawal was capped at Rs 1,000, which has been raised to Rs 1 lakh now.

The multi-state cooperative bank registered a net loss of Rs 6,835 crore in FY20 and has a negative net worth of Rs 5,850.61 crore.

As of March 31, 2020, it had a deposit base of Rs 10,727.12 crore, advances of Rs 4,472.78 crore and gross non-performing assets of Rs 3,518.89 crore.

Photograph: Francis Mascarenhas/Reuters