Centrum to takeover PMC Bank
Reserve Bank of India (RBI) cleared proposal to takeover of Punjab and Maharashtra Cooperatives Bank (PMC Bank) by a consortium of non-bank lender Centrum Financial Services & fintech startup BharatPe.
This decision was taken in the backdrop of collapse of Punjab & Maharashtra Cooperatives Bank. This state cooperative lender was on the verge of collapse when regulator seized it on September 24, 2019. Regulator seized the cash withdrawals for six months and launched an investigation into its accounting lapses. Following this, Centrum Financial Services and BharatPe had submitted a joint proposal to overtake PMC Bank in February 2021.
RBI has decided to grant in-principle approval to Centrum so as to set up a small finance bank. It will be set up under on-tap licensing norms. On-tap licensing means, when regulator gives out bank licences on continuous basis rather than once in several years.
Centrum Financial Services
It is a step-down subsidiary of listed entity Centrum Capital which provides credit to small and mid-sized companies having asset of ₹2 lakh to ₹2 crore. Resilient Innovations Pvt. Ltd, operating BharatPe, will also be an equal partner in small finance bank.
Punjab & Maharashtra Co-operative Bank Limited (PMC)
PMC is a multi-state co-operative bank that was established in 1983. It has 137 branches across India while about 100 branches are in Maharashtra. It is regulated by Reserve Bank of India and is registered under Cooperative Societies Act.
Month: Current Affairs - June, 2021