Maharashta Government Will Explore Option Of PMC Bank Merger: Devendra Fadnavis
PMC Bank customers gather outside the Sion police station to file a complaint, on Sept. 26, 2019. (Photograph: PTI)

Maharashta Government Will Explore Option Of PMC Bank Merger: Devendra Fadnavis


The Maharashtra government will explore the possibility of merging the crisis-hit Punjab and Maharashtra Co-operative Bank with another bank, Chief Minister Devendra Fadnavis said.

Assuaging concerns of depositors facing hardships due to restrictions on withdrawal of funds from the scam-hit bank, the chief minister said that money of account-holders would remain safe.

The alleged scam - to the tune of Rs 4,355 crore - is attributed to loans given to realty firm Housing Development and Infrastructure Ltd., which were allegedly hidden from regulators' scrutiny when they turned into non-performing assets.

Also read: PMC Bank Scam: HDIL’s Wadhawans Get Enforcement Directorate Custody Till Oct. 22  

"Unfortunately, a revival package for PMC bank is not in jurisdiction of the state government, but with the Reserve Bank of India. But, the state government can facilitate merger of the bank with other bank. I have already spoken to the Prime Minister and the Finance Minister on this issue. I will again peruse the matter after polls," Fadnavis said in an interaction with select journalists while on campaign for the Oct. 21 polls.

When asked about the steps taken by the Bharatiya Janata Party-Shiv Sena government, Fadnavis said the accused have been arrested and their assets seized.

"Depending on the provisions of the Depositors Act the state or the Central government can auction the assets (of the accused) and pay depositors," he said, though the process may take time.

Investigators have so far arrested five persons, including promoters of HDIL and top executives of the bank, in connection with the alleged scam.

Also read: PMC Bank Victims: Rs 1 Lakh Insurance In 1993 Should Be Rs 1 Crore Today

The depositors of the bank have been holding protests demanding release of their money, as the RBI has imposed restrictions on withdrawal of funds from their accounts.

The central bank initially capped withdrawals at Rs 1,000 over six months in view of liquidity crisis, and later hiked it to Rs 40,000.

Fadnavis said bank deposits upto Rs one lakh are safe and insured.

“However, the number of deposits (in the bank) holding funds less than Rs one lakh is more. The problem is with housing societies, religious institutions and individuals who have higher deposits. I will pursue the matter after the polling ends. Even though the issue is under RBI jurisdiction, I will pursue with the Centre to see that depositors money returned to them through whatever power at their disposal under law,” Fadnavis said.

The chief minister admitted that the model code of conduct restricted the government from playing a more "proactive" role in the PMC bank case. "Due to the poll code in place there are some restrictions," he added.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.