Beleaguered lender Punjab & Maharashtra Co-operative Bank Ltd. is reviewing the viability and feasibility for four proposals it received this week for potential equity investment, according to the Reserve Bank of India.
In November, the multi-state cooperative bank had requested expressions of interest from potential bidders for an equity investment, which will lead to the lender’s reconstruction. The deadline for submission was set at Dec. 15.
“The bank has informed Reserve Bank that in response to EoI, four proposals have been received,” the RBI said in its statement on Friday. “These proposals will be examined by the bank with regard to their viability and feasibility taking into account the best interest of the depositors.”
The objective of the sale process is to identify a suitable equity investor or group of investors willing to take over management control, revive the bank and commence regular day-to-day operations. The winning bidder may also consider conversion of PMC Bank to a small finance bank, after making an application to the RBI, according to the process document.
To give the bank more time to complete its evaluation process, the regulator has extended its limits on deposit withdrawal till March 31, 2021 from Dec. 22, 2020 before, the central bank said. As per the latest directions, customers can only withdraw up to Rs 1 lakh from their deposit accounts.
PMC Bank customers have been facing limits on deposit withdrawals since September 2019, after the bank’s financial position deteriorated considerably. The regulator also superseded the board and appointed an administrator to run day-to-day business, after financial irregularities were discovered in its balance sheet.