RBI issues draft scheme of amalgamation of PMC with USFB

The RBI has issued a draft scheme for the amalgamation of the Punjab and Maharashtra Cooperative (PMC) Bank and Unity Small Finance Bank (USFB), a banking company incorporated in India under the Companies Act, 2013, with its registered office in New Delhi. The USFB commenced operations with effect from November 1, 2021. 

The draft scheme of amalgamation envisages the USFB taking over the assets and liabilities of PMC Bank, including deposits, in accordance with the provisions of the scheme, providing a greater degree of protection for depositors.

The USFB is being set up with a capital of approximately Rs 11 billion, as against the regulatory requirement of Rs 2 billion for the setting up of an SFB. Further, Unity SFB has issued equity warrants worth Rs 19 billion to the promoters on November 1, 2021, to be exercised at any time over an eight-year period. 

The RBI has invited suggestions and objections on the draft scheme till December 10. A final decision will be taken after that, the regulator said. 

The Maharashtra-based PMC Bank, a multi-state urban cooperative bank, was placed under business restrictions with effect from the close of business on September 23, 2019, on account of fraud, which led to a steep deterioration in the net worth of the bank.