The Punjab and Maharashtra Co-operative Bank (PMC) incurred a huge loss and it led to its net worth getting all wiped out last year. It posed some serious challenges for its revival.
Centrum Financial Services Ltd. is to set up a small finance bank that would take over the PMC bank. The RBI said that it has given approval to CFSL to take over the scam-ridden PMC by granting a joint proposal by CFSL and BharatPe.
In February 2021 Centrum Financial Services and BharaPe had submitted the proposal to take over PMC bank underwent many accounting lapses and was on the verge of collapsing. The RBI granted a license for commencement of banking business under Section 22(1) of the Banking Regulation Act. It said that the process would begin only after the small finance bank is created. D N Patel and Justice Jyoti Singh, HC judges granted time to the RBI in order to file an affidavit on the development in the matter further listing the case hearing on August 20.
This decision from the RBI comes as a relief to the depositors whose funds in the cooperative bank have been stuck for over two years now. This would ease the trouble faced by the bank’s customers who were unable to withdraw their money. Numerous protests were also held outside the central bank’s offices in the hope that their voice would be heard.