SVC Bank Denies Reports On Merger With PMC Bank

The SVC Co-operative Bank has denied reports of merger with the crisis-hit Punjab and Maharashtra Co-operative (PMC) Bank.

“We have come across a rumour on social media platforms about a merger between us and PMC Bank. We request everyone not to pay heed to such false and baseless statements,” the Bank said in a notice to its customers and shareholders.

The Bank, which was earlier known as The Shamrao Vithal Co-operative Bank, emphasised that it is committed to protect the interests of its depositors, shareholders and stakeholders. It added that it will take strong action against people spreading such rumours.

As at March-end 2019, Mumbai-based SVC Bank, had deposits and advances of ₹16,264 crore and ₹11,500 crore, respectively.

Mumbai-based PMC Bank was placed under Directions for six months by the Reserve Bank of India with effect from the close of its business on September 23, 2019.

Read more: RBI puts Mumbai-based PMC Bank under directions

The central bank said directions for PMC Bank were necessitated due to major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures under various Off-site Surveillance reports that came to the Reserve Bank’s notice recently.

PMC Bank reportedly has a very large single party exposure of about ₹6,500 crore (accounting for about 73 per cent of its total loans) to the bankrupt HDIL group. The group is understood to have not serviced the loans for the last couple of years.

Depositors of PMC Bank have been having a harrowing time since the imposition of the Directions as they can withdraw only up to ₹40,000 during the six month Direction period. They have taken to the streets demanding RBI and the Government's intervention in getting their deposits back.

Related news: PMC Bank case: Depositors body seeks to raise withdrawal limit to ₹1 lakh

About four depositors lost their lives due to the shock that their entire life savings are locked up in the bank and there is no assurance from the authorities about the safety of their deposits. Depositors are planning to intensify their agitation to get back their deposits from October 22.