The Reserve Bank of India (RBI) has opted to give in-principle approval to Centrum Financial Services Limited to establish a small finance bank and thus set the stage for the takeover of the Punjab and Maharashtra Cooperative Bank (PMC) that has been under restrictions for around a year and a half now.
Centrum, along with BharatPe, had submitted an expression of interest to acquire PMC Bank to the RBI.
"The RBI would consider granting a licence for commencement of banking business under Section 22 (1) of the Banking Regulation Act, 1949, on being satisfied that the applicant has complied with the requisite conditions laid down by RBI as part of 'in-principle' approval," the central bank's statement granting the permission read, as per a by Business Today.
In February, Centrum had responded to the expression of interest notification that was issued on 3rd November.
PNB was earlier embroiled in controversies after the RBI had found out that it had created several fake accounts to shield loans worth Rs 6700 crore given to the nearly-bankrupt Housing Development Infrastructure Ltd (HDIL).
Several restrictions, such as the prohibition on cash withdrawal, the investigation into lapses in accounting, were imposed on it. Since then, the urban cooperative bank and the RBI are working towards its possible resolution and the recovery of bad loans.
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