RBI’s in-principle approval to Centrum Financial Services to set up SFB

RBI’s in-principle approval to Centrum Financial Services to set up SFB
Share This :

The (RBI) on Friday said it has granted ‘in-principal’ approval to Centrum Financial Services Limited to set up a small bank. The approval has been given to Centrum in accordance with the offer it made in response to the expression of interest (EoI) to take over the beleaguered Punjab and Maharashtra Cooperative Bank (PMC).

The consortium of Centrum and Bharat Pe had expressed interest in taking over According to reports, both Centrum and Bharat Pe will hold 50 per cent stake in the small bank and assets and liabilities of the multistate cooperative bank will be transferred to the SFB.

Centrum is planning to issue to raise equity capital through rights issue or a private placement (including but not limited to a qualified institutional placement) in accordance with the provisions of applicable laws. It will look at raising upto Rs 1,000 crore through Non-Convertible Debentures (NCDs).

In 2019-20, PMC Bank’s total deposits stood at Rs 10,727.12 crore with advances at Rs 4,472.78 crore. The bank posted a net loss of Rs 6,835 crore with net worth at a negative Rs 5,850.61 crore.

had placed the bank under restrictions in 2019 following irregularities in the bank. The then head of the bank had written a letter to the wherein he had described the relation of the HDIL’s promoter family Wadhawan with in detail, and how both sides helped each other out.

He had admitted to concealing information from the board, auditors, and regulators, and replacing stressed accounts with dummy accounts. He had also stated that “all the decisions for granting of overdrawals to these accounts was as per my instructions”, and absolved other executives who, he said, had no role except for acting in good faith in executing his instructions.

, RBI’s in-principle approval to Centrum Financial Services to set up SFB, Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link

Share This :

Leave a Reply