Depositors Of PMC Bank, 20 Other Stressed Lenders To See Relief By Year-End
Depositors of 21 banks under regulatory directions, including the Punjab & Maharashtra Co-operative Bank Ltd., could get up to Rs 5 lakh of their deposits by year-end. This is the part of deposits insured by the Deposit Insurance and Credit Guarantee Corporation
In a statement on Wednesday, the DICGC said it will settle claims of insured deposits by Dec. 29, 2021. The remaining uninsured share of deposits, if any, are typically settled at the time of resolution or liquidation of a stressed lender.
According to the process detailed by the DICGC, the banks under Reserve Bank of India's directions will need to create a list of depositor claims, including principle and interest by Oct. 15. The bank then has up to Nov. 29, to verify these claims and submit an updated list to the DICGC.
Once the DICGC has received the updated list, it will clear the claims up to Rs 5 lakh within 30 days.
"It is advised that the depositors may contact the said banks and submit the declaration of willingness and also update any other documents/information, if needed by the bank, so that their claims can be included by the bank in the list by Oct. 15, 2021," DICGC said in its statement.
Last month, Union Finance Minister Nirmala Sitharaman announced that DICGC will pay depositors the insured deposit amount, up to Rs 5 lakh, within 90 days of a bank being put under moratorium on RBI's directions. The new rules came into effect on Sept. 1.
Previously, depositors had to wait eight to 10 years before they could access their deposits from the point of a bank going into moratorium, Sitharaman had said.
The need for such an amendment was made necessary after depositors of PMC Bank have continued to face restrictions on deposit withdrawals since September 2019.
Currently, PMC Bank depositors are allowed to withdraw up to Rs 1 lakh from their bank accounts. They will now have access to Rs 5 lakh each of their deposits by year-end, once DICGC settles claims. The remaining would be paid out on resolution of the lender depending on whether a haircut on deposits is envisaged as part of the resolution plan or not. A rescue plan for PMC Bank is being finalised by the RBI and a consortium of Centrum Financial Services Ltd. and BharatPe.