While a majority of depositors are happy that a resolution of the PMC Bank crisis is in sight, there are several cooperators who feel that the revival should have happened with the help of bigger UCBs and not through a private financial entity.
It bears recall that RBI has granted “in-principle” approval to Centrum Financial Services Limited to set up a Small Finance Bank when the latter applied for the same in the context of PMC Bank.
RBI statement read “An “in-principle” approval has been accorded in specific pursuance to the Centrum Financial Services Limited’s offer dated February 1, 2021 in response to the Expression of Interest notification dated November 3, 2020 published by the Punjab & Maharashtra Co-operative Bank Ltd., Mumbai”.
Reacting to RBI’s in principle approval to Centrum Financial Services for takeover of the crisis-hit PMC bank and re-launch of it as a small finance bank, NCUI President, Dileep Sanghani said, ‘This is indeed welcome. However, it should be ensured that all the depositors should get back their deposits without any conditionality. Further, it would have been better if all the big UCBs should have mobilized the funds together to revive the bank.’
Sanghani’s views were endorsed by Bhima Subrahmanyam, Managing Director, NAFSCOB, and President, International Cooperative Banking Association. Bhima said, ‘The move is indeed appreciable. However, all the depositors should get back their deposits without any conditionality’.
Bhima further elaborated that the largest urban cooperative banks should have taken over PMC bank and started a small finance bank, as the PMC had an excellent image before the fraud happened. In that way, the cooperative sector missed an opportunity, Bhima felt.
However, Jyotindra Mehta, President, NAFCUB, reacting to this development said, ‘This is in accordance with the wishes of the sector, and the depositors. This will no doubt boost the image of the sector. However, the culprits who committed the fraud in the bank must be punished.”
GH Amin, Chairman, Cooperative Bank of India, and Chairman, Gujarat State Cooperative Union welcomed the move, and said, ‘It is a good gesture, of taking over a crisis-hit bank by a small finance bank, and reviving it. The depositors will get an assurance of getting back their deposits.’
Whatever the way, the fact remains that the average depositor is happy with the resolution. TOI reported the reactions of depositors from Mumbai who said this is the first right step. UCB expert and RBI Board member Satish Marathe expressed confidence that all the depositors would get their money in due course of time.
(With inputs from NCUI Press release)