As per the scheme deposit amount up to Rs 5 lakh can be claimed by the depositors over a period of three to ten years.
The scheme says that depositors can claim up to Rs 50,000 at the end of three years and further Rs 1 lakh at the end of four years, Rs 3 lakh at the end of five years and Rs 5.50 lakh at the end of 10 years. Huh.
It may be recalled that RBI in June 2020 doubled the amount of withdrawals by depositors from PMC Bank from Rs 50,000 to Rs 1 lakh, allowing over 84 per cent of the depositors to withdraw their entire account balance.
RBI said the above limits are for depositors who exceed the withdrawals already made.
The remaining balance deposits of PMC Bank depositors as per this schedule will be paid within 10 years from the date of central government Notifies this scheme of amalgamation.
Further, the central bank has clarified that interest on these deposits will not accrue for five years after March 31, 2021.
“No further interest shall be payable on interest bearing deposits of the transferor bank for a period of five years from the appointed date. Provided further that interest @ 2.75 per cent per annum shall be paid on the retail deposits of the transferor bank (PMC) which are fixed shall remain outstanding after the said period of five years from the date on which the interest shall be payable from the date not later than five years from the due date,” the RBI said.
80% insured institutional deposit will be converted into Permanent Non-Cumulative Preference Shares (PNCPS) of Unity SFBs, with a dividend of one per cent annually.
After ten years from the due date, Unity SFB may consider additional benefits for PNCPS holders, either in the form of a move in the coupon rate or providing a call option, subject to approval from the Reserve Bank.
The remaining 20% institutional deposit will be converted into equity warrants of Unity SFB at a price of Re 1 per warrant.
These equity warrants will be further converted into equity shares of Unity SFB as and when it goes for one at the time of Initial Public Offering (IPO).
“In respect of every other liability of the Transferee Bank (PMC), the Transferee Bank (Integration) shall pay to the creditors only the principal amount, as and when they become due, in accordance with the agreements entered into between them before the due date or terms and The terms were agreed upon,” RBI said.
In June, the RBI had given in-principle approval to Unity SFB, a joint venture between Centrum Financial Services and Resilient Innovation Pvt. Ltd which runs payments company BharatPe to acquire PMC. Ekta recently started operations from 1st November.
At the time the restrictions were announced, PMC Bank had 137 branches and around Rs 11,600 crore was deposited.
RBI has been looking for a solution to PMC since September 2019. The instructions on the bank were last extended on June 25, 2021 till December 31, 2021. “Given the financial position of PMC Bank and in the absence of proposals for capital infusion, the bank itself was not viable. In that event, the only course of action could have been to cancel its license and take it for liquidation, wherein the depositors would have received payment up to the insurance limit of T 5 lakh,” RBI said in a release.
The USFB has already been set up with a capital of about Rs 1,100 crore as against the regulatory requirement of Rs 200 crore. The central bank has invited suggestions and objections from members of PMC and USFB, depositors and other creditors on the draft plan by December 10.