The Reserve Bank of India (RBI) on Monday placed in public domain a draft scheme for amalgamation of Punjab and Maharashtra Cooperative (PMC) Bank and Unity Small Finance Bank (USFB). 

The draft envisages takeover of assets and liabilities of PMC Bank, including deposits, by USFB in terms of the provisions of the scheme, giving a greater degree of protection for depositors. 

“It may be seen that USFB is being set up with capital of about Rs 1,100 crore as against a regulatory requirement of Rs 200 crore for setting up of a small finance bank under the guidelines for on-tap licensing of small finance bank in private sector dated December 5, 2019, with provision for further infusion of capital at a future date after amalgamation,” the RBI said today. 

Equity warrants of Rs 1,900 crore, to be exercised anytime within a period of eight years, have been issued by USFB on November 1, 2021 to the promoters to bring further capital, according to the draft scheme. 

The RBI had invited suggestions on the draft scheme till December 10. A final decision would be taken after that, it said. The depositors of Maharashtra-based PMC Bank will get their money back over a period of three to ten years, according to the draft scheme of amalgamation. 

According to this plan, the acquiring bank will pay the amount guaranteed by DICGC of up to Rs 5 lakh to depositors. For the remaining amount, the bank will pay up to Rs 50,000 above the payment already made at the end of two years. It will pay an amount of up to Rs 1 lakh at the end of three years, Rs 3 lakh at the end of four years, Rs 5.5 lakh at the end of five years and the entire remaining amount will be paid after ten years.