In order to revive the fraud affected PMC Bank, 3 companies submit a letter of intent

A Mumbai-based financial services group is one of three companies believed to have filed a Letter of Intent (LoI) to revive the fraudulent Punjab and Maharashtra Co-operative (PMC) bank.

Last date for LoI

The deadline for submitting the LoI to the bank’s administrator was December 15th. The administrator, AK Dixit and his team weigh the pros and cons of the LoIs. Based on their recommendations, the Reserve Bank of India (RBI) will take a call to see which company is best placed to revive the bank and go back to business. Since the above process is expected to take a few months, the central bank is expected to extend the validity of its instructions currently valid until December 22 by three months.

According to the bank, the financial services group that submitted its LoI is run by the former Indian head of a foreign bank.

Mumbai-based Surinder Mohan Arora (Ideal Group) has filed the LoI along with people acting together. There is also one entity that submitted the LoI, but its name could not be determined.

Dixit said in a communication to clients last month: “We are working to find a way out to resolve the bank in the best interests of all parties, especially depositors.

“Different models / options are being considered and discussions with different companies will continue. Despite the hurdles created by pandemics, the matter is getting our attention under the leadership of RBI.

Reviving the Lender

Chander Purswani, President of the PMC Depositors Forum, expects the bank to be revitalized in the next few months. This will give the harried depositors (many had their savings parked for life with the bank) access to their funds, he added.

He stressed that due to the £ 1 per depositor cap, depositors face immeasurable misery for the entire 15 month period that the bank is under the instructions.

PMC Bank was placed under RBI instructions as of the bank’s close on September 23, 2019 due to a massive fraud committed by the promoter of a real estate group and some bank officials.

As per the expression of interest, the bank wishes to identify a suitable equity investor / group of investors willing to take control of the management in order to revitalize the bank and resume normal business operations.

After normal day-to-day business has started, investors are free to convert the bank into a small financial bank by filing an application with the Reserve Bank of India, provided that RBI guidelines are followed, the voluntary transition of primary (municipal) credit union banks (UCBs) ) on small financial banks (SFBs) has been added.