Gadkari suggests merger of PMC Bank branches with strong local banks

Shiv Kumar
Tribune News Service
Mumbai, June 5

Advertisement

Union Transport Minister Nitin Gadkari has suggested merger of troubled Punjab and Maharashtra Co-operative (PMC) Bank’s branches with strong regional banks in their respective states.

In a letter to RBI Governor Shaktikanta Das, Gadkari said he was concerned about the depositors of the troubled bank. “In order to protect the interest of these depositors of PMC bank, various measures may be suggested to the Reserve bank … among others merger/amalgamation of the bank into a strong bank, branch merger instead of bank merger, conversion of some portion of deposits of

depositors into Innovative Perpetual Debt Instruments i.e. IPDI, setting up of fast track courts for speedy disposal of defaulters’ cases etc”, the minister’s letter said.

Gadkari also suggested that the Reserve Bank of India consider a one-time settlement scheme with those who defaulted on payments to PMC Bank.

“I therefore request you to issue necessary instructions … to introduce a special OTS scheme for defaulters of PMC bank. This will help the bank improve its profitability and liquidity by releasing outstanding advances locked up in NPAs and thereby reduce its erosion level,” Gadkari added in his letter.

Gadkari’s suggestion for merging PMC Bank’s branches with strong banks in their respective states comes months after NCP leader Sharad Pawar mooted a similar idea. The NCP chief had suggested merging PMC Bank’s branches in Maharashtra with the Maharashtra Urban Co-operative Bank since most of its depositors are from this state.

According to the PMC Bank Depositors’ Association, 92 per cent of the bank’s branches are in Maharashtra.