PANJIM: All hopes of Mapusa Urban Cooperative Bank, which has 24 branches, and Madgaum Urban Cooperative Bank, which has nine branches, with a total of three lakh customers of merging with Mumbai-based Punjab and Maharashtra Cooperative Bank (PMC Bank) have fallen flat.
Reserve Bank of India, in an unprecedented move, has placed PMC bank under directions for six months from the close of business of the bank on September 23, 2019. Depositors will be allowed to withdraw a sum not exceeding Rs 1,000 of the balance in every savings bank account or current account or any other deposit account by whatever name called, subject to conditions stipulated in the RBI directions.
Speaking to Herald, Mapusa Urban Cooperative Bank director Ramakant Khalap said, “This is a new development. It is a surprise and a shock to all of us in Goa. But we have not lost hope. We are talking to other banks now, as it is not possible with PMC bank. We have TJSB (Thane Junta Sahakari Bank Ltd). The people of Goa have to be protected and I am sure our Chief Minister Dr Pramod Sawant has the acumen to sort out this imbroglio and help the people of Goa.”
Madgaum Urban Cooperative Bank managing director Kishor Amonker, who faces an AGM on September 29, said, “Now it seems the option to merge with PMC is out of question. Now even RBI will not allow PMC to merge with any other bank.
Our bank’s auditing was done by two banks, PMC and TJSB. In fact TJSB is also of the same status as PMC with about Rs 20,000 crore-business, but PMC asked us to wait and not contact TJSB but our board decided that whichever comes first, we will go ahead. Now we will have to approach TJSB.”
Madgaum Urban Cooperative Bank, before the mining ban in 2012, had been earning a good profit with a growth rate of 17-18 per cent every year, but after the ban, all cooperative banks in Goa started to turn red and as of now, the bank has a loss almost Rs 58 crore. This loss is provisioning loss as the NPA was going high.
As the news that the merger failed, there was a lot of crowd and chaos at the PMC branch in Pajifond Margao on Tuesday.
“We have a customer base of 54,000 and these customers will have to wait till the solution of merger with a larger cooperative bank is found. Their money is safe and they will get the interest too, but at the moment neither can they deposit nor withdraw as per directions from RBI,” Amonker added.
In a notice to its customers, PMC Managing Director Joy Thomas said, “PMC bank has been put under regulatory restriction under Section 35A of B.R Act by the RBI for a period of 6 months due to irregularities disclosed to RBI. As MD of the bank I take responsibility and assure all the depositors that these irregularities will be rectified before the expiry of 6 months. All efforts are being made to remove the restrictions by rectifying the irregularities. I know it is a difficult time for all of you and any apology may not restore the pain you are undergoing. Please cooperate with us. We assure that we will definitely overcome this situation and stand strong.”
The bank is a multi-state scheduled urban co-operative bank with its area of operation in Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. It has 137 branches all over India with six of them in Goa.
Without prior approval in writing from the Reserve Bank, PMC bank will also not be able to grant or renew any loans and advances, make any investment, incur any liability including borrow funds and accept fresh deposits, disburse or agree to disburse any payment, whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose any of its properties or assets except as notified in the RBI directions.
The central bank, in a statement, said, the issue of the directions should not, per se, be construed as a cancellation of a banking license by RBI. The bank will continue to undertake banking business with restrictions until further notice/instructions. RBI may consider modifications of these directions depending upon circumstances.
RBI said the directions have been imposed in exercise of powers vested in it under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949 read with Section 56 of the said Act.
As on March-end 2019, PMC Bank had deposits and advances aggregating to Rs 11,617 crore and Rs 8,383 crore, respectively.
