PMC receives multiple EOI amidst huge losses

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PMC receives multiple EOI amidst huge losses

BharatPe and Centrum Group have recently submitted a Joint expression of Interest (EOI) to The Reserve Bank of India in an attempt to take over the Punjab and Maharashtra Cooperative Bank (PMC). The Delhi-based BharatPe, a payments startup, and Centrum Group, a financial services firm are said to have equal say in this new venture. They have submitted an EOI having equal stakes in the merger with PMC. There are also reports that Ludhiana-based British businessman Sanjeev Gupta’s Liberty House has also offered an EOI to The Reserve Bank of India to take over PMC. In conclusion, RBI has received a total of four EOI to take over PMC. The details of the other two contenders are yet to be disclosed. RBI has further extended the restrictions on the Punjab and Maharashtra Cooperative Bank till March 2021. 

If BharatPe and Centrum Group’s proposal is approved, both the firms are set to benefit from it. BharatPe is aiming to build a 5000 crore loan book in the next two years. This payments startup is currently providing Rs. 120 – Rs. 125 crore every month to the partners who use BharatPe as a payments platform. They also wish to raise their tech capabilities and run The Mumbai-based centrum group as a small finance Bank that will reduce the startup’s costs and run it as a digital-first bank.

PMC Bank by the end of March 2020 had total advances of Rs. 4,473 crore, an NPA of Rs. 3,519 crore along with a holding of deposits at Rs. 10,727 crores. The Bank also holds a share capital of Rs. 293 crore. However, the bank also experienced an overall loss of Rs. 6,835 crore that led to the bank having a negative net worth of Rs. 5,850 crores. It is due to this massive loss that EOI has been made to the Reserve Bank of India.

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