PMC Bank: Depositors who invested over 5 lacs

In terms of the scheme of amalgamation of PMC Bank with Unity Small Finance Bank (Unity SFB), the Depositors of the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank with deposits over ₹5 lakh will get their money back in a piecemeal manner over an extended 10-year period.

Further, no further interest will be payable on the interest-bearing deposits of the transferor bank for five years from the appointed date. These clauses are unlikely to go down well with depositors (having deposits over ₹5 lakh), especially the senior citizens, who struggled to make ends meet amid the pandemic due to the ₹1 lakh per depositor cap on withdrawal during the entire two-year period their bank has been under directions.

Modalities

1. As per the scheme, Unity SFB (transferee bank) will pay the amount received from the Deposit Insurance and Credit Guarantee Corporation to all the eligible depositors of PMC Bank (transferor bank), which would be an amount equal to the balance in their deposit accounts or ₹5 lakh, whichever is less;
2. At the end of two years from the appointed date, over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹50,000, whichever is less, on-demand only to the retail depositors of the transferor bank.
3. The appointed date is the date when the undertaking of the transferor bank will stand transferred to, and vest in the transferee bank.
4. At the end of three years from the appointed date, over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹1 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.
5. At the end of four years from the appointed date, over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹3 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.
6. At the end of five years from the appointed date, over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹5.50 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.
7. The entire remaining amount of deposits (after the payments over five years) will be paid in the accounts of the retail depositors of transferor bank after 10 years from the appointed date, on demand.
8. Interest at the rate of 2.75 per cent per annum shall be paid on the retail deposits of the transferor bank which shall be remaining outstanding after the said period of five years from the appointed date. This interest will be payable from the date after five years from the appointed date.

Thus, the transferee bank will have time up to 20 years from the appointed date, to repay the amount received from DICGC towards payment to the insured depositors, which can be done in one installment or in several instalments.