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State working on merging PMC bank with Maharashtra State Cooperative Bank

State working on merging PMC bank with Maharashtra State Cooperative Bank
State working on merging PMC bank with Maharashtra State Cooperative Bank

A merger of the scam-hit PMC bank with the financially sound MSC Bank could provide relief to lakhs of aggrieved depositors, NCP leader Jayant Patil said

The state government is mulling over merging the scam-hit Punjab & Maharashtra Co-operative (PMC) Bank with the Maharashtra State Co-operative (MSC) Bank, a decision that could spell relief for lakhs of affected depositors.

Nationalist Congress Party (NCP) leader and Maharashtra Cabinet Minister Jayant Patil said talks about the possible merger are already underway.

“Depositors of PMC Bank will get relief if the bank is merged with Maharashtra State Cooperative Bank. We are working on it. If need arises, we will write to the Reserve Bank of India (RBI) to merge the two banks,” Jayant Patil told media persons.

Patil further said that he met with the chairperson of Maharashtra State Cooperative Bank yesterday to talk about the merger.

“We want to assure the PMC Bank depositors that the government stands with them. The merger of the two banks will definitely help small depositors,” he added.

The minister claimed that MSC Bank’s financial health is sound and the decision to merge the banks will provide relief to lakhs of aggrieved PMC Bank depositors.

If all goes to plan, the process of merging the two banks could complete in the next two to three months, he said.

Back in September, the RBI imposed restrictions on PMC bank after it found major financial irregularities in its dealings, including under-reporting of NPAs. It even imposed a withdrawal limit for depositors, from an initial Rs 1,000 to the current Rs 50,000.

During the course of the investigation, the probing agencies found that bank officials had allegedly colluded with promoters of HDIL and illegally routed funds to the now-bankrupt firm, which accounted for 73 percent of PMC’s loan book.

To date, Economic Offences Wing (EOW) of Mumbai Police has arrested 12 persons in connection with the Rs 4,355 crore scam. They include several top bank officials, Rakesh and Sarang Wadhawan (promoters of HDIL), and auditors.

Meanwhile, with no guarantee from the government or RBI about the safety of their deposits, at least seven distressed bank depositors have died since it curtailed operations.

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