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Centrum Financial Services Ltd (CFSL) has initiated the process of establishing a small finance bank (SFB), which will eventually take over the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank, by taking steps towards creating necessary infrastructure in this regard, according to the Reserve Bank of India (RBI).
The RBI had accorded “in-principle” approval to CFSL on June 18, 2021, to set up an SFB. This approval was in specific pursuance to CFSL’s offer in response to PMC Bank’s Expression of Interest (EoI) notification.
CFSL, which is a non-banking finance company, and Resilient Innovations Pvt Ltd (BharatPe), which is a fintech company, are equal partners in setting up the SFB.
Petition nixed
In an additional affidavit filed in the Delhi High Court in the Bejon Kumar Mishra (petitioner) versus Union of India & Others (Respondents) case, RBI said: “It is envisaged that Central government will be approached for approval and notification of a scheme of amalgamation of PMC Bank with the proposed SFB under Section 45 of the Banking Regulation Act after the proposed SFB starts functioning.” The RBI has sought the dismissal of the writ petition filed by Mishra
The central bank submitted that all efforts are underway to expedite the resolution of PMC Bank in the best possible manner and in the larger interest of all depositors of that Bank.
Also read: Depositors of PMC Bank still await clarity on withdrawals
Mumbai-based PMC Bank was placed under All Inclusive Directions with effect from close of business on September 23, 2019, on account of major financial irregularities (fraud perpetrated by a real estate group), failure of internal control and systems of the bank and wrong/ under-reporting of its exposures under various off-site surveillance reports.
The bank has been under directions for close to two years now and depositors, especially senior citizens, have been finding it difficult to make ends meet.
Deposit withdrawal has been capped at ₹1 lakh per depositor during the entire period the bank is under directions.
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