The payments company BharatPe and financial services firm Centrum Group plan to make a formal bid for the crisis-hit Punjab and Maharashtra Cooperative (PMC) Bank next week. BharatPe and the two-decade old integrated financial services group Centrum Group had submitted an expression of interest (EoI) jointly in December 2020 to take over the Mumbai based cooperative bank. Both Bharat Pe and Centrum will hold equal stake in PMC Bank if they successfully acquire it.
Steel baron Sanjeev Gupta's Liberty House Group is one of the three other groups that have submitted EoIs to the RBI for acquiring. The names of the other bidders are not known yet.
BharatPe and Centrum Group are among four groups that have made the submissions to the Reserve Bank of India (RBI) for the acquisition of PMC Bank. Last date for submission of EoIs was December 15, 2020. As per the RBI, the PMC Bank will examine viability and feasibility of these proposals, considering the best interest of the depositors, which would take some more time.
Last year in November 2020, PMC Bank had invited EoIs from external investors for its reconstruction, which has been under RBI moratorium since 23 September 2019. The exercise is meant to find equity investors willing to take over its management in order to revive the beleaguered lender and resume its day-to-day operations.
This is the first time that NBFCs (Non-Banking Financial Companies), corporates, and high-net-worth individuals have shown keenness in acquiring an urban-cooperative bank (UCB).
Recently, the RBI extended moratorium on PMC Bank by three more months until 31 March 2021, keeping in view the best interest of all stakeholders. The directions were last extended on 19 June 2020, up to 22 December 2020. PMC Bank was placed under directions by the RBI on 29 September 2019, after a money laundering scam came to light. The central bank discovered that the lender allegedly created fictitious accounts to hide over Rs.6,700 crore in loans extended to the almost-bankrupt Housing Development Infrastructure Limited (HDIL). The urban co-operative bank and the RBI have been exploring avenues for its resolution and recovery of bad loans.
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