PMC Bank gets new administrator as Bhoria steps down: RBI

“The present Administrator J.B. Bhoria is stepping down on 22 September 2020 due to health reasons. It has been decided to appoint A.K. Dixit, ex-general manager, Union Bank of India as the new administrator of the bank with effect from 23 September," RBI said in a notification.

Detailing the reasons behind the sluggish turnaround of PMC Bank, the regulator said huge losses by the bank and steep erosion in deposits pose challenges to revival.

“While the administrator of PMC bank and the RBI have been exploring various options for resolution of the bank, several factors such as huge losses incurred by the bank resulting in its entire net worth getting wiped out, steep erosion in deposits, continue to pose serious challenges in finding a workable plan for revival of the bank," it said.

According to RBI, the cooperative bank has also been making efforts for recovery of bad loans but has been constrained by the Covid-19 pandemic and legal complexities.

“Nevertheless, in the interest of the depositors, PMC bank and RBI are continuing to engage with the stakeholders to explore the possibility of finding a viable and workable solution for the resolution of the bank," it said.

On 24 September last year, RBI put severe curbs on PMC Bank, including on cash withdrawals, amid a probe into accounting lapses. Cash withdrawals were capped at ₹1,000 per account for six months, but gradually relaxed to ₹100,000 in June this year. “With the above relaxation, more than 84% of the depositors of the bank will be able to withdraw their entire account balance," the central bank had said on 19 June.

PMC Bank was also barred from making fresh loans or accepting deposits. The restrictions under Section 35A of the Banking Regulation Act are aimed at preventing a run on the bank.

As on 31 March 2019, the Mumbai-based bank had deposits of ₹11,617.34 crore and loans of ₹8,383.33 crore. While the bank’s gross bad loans, according to its FY19 annual report, were at 3.76% of its advances, it is believed that the figure is much higher.

The multi-state scheduled urban cooperative bank has a network of 137 branches, with presence in Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh.