Unity Small Finance Bank: Unity Small Finance Bank (USFB), a joint venture between Centrum Group and payments app BharatPe 51:49, said on Thursday that it is planning to join Punjab and Maharashtra Cooperative (PMC) under the scheme of amalgamation or amalgamation. PMC) The entire principal will be paid to the depositors of the bank.
Depositors are opposing the merger
This development has come to the fore after the depositors of PMC Bank led by Sahakar Bharti announced to move the Supreme Court against this scheme. Sahakar Bharati is a cooperative society established by Satish Marathe, board member of RBI. In a recent release, Sahakar Bharati argued that the merger was unilateral and against the rights of the depositors.
Depositors can choose to stay with the bank
The bank said in a press release, “96 per cent of the depositors with deposits up to Rs 5 lakh will be paid upfront (subject to the terms and conditions of DICGC norms). These depositors remain with Unity Bank or withdraw the amount; And can choose to take advantage of attractive interest rates of 7 per cent and make additional deposits.” The bank is offering up to 7 percent interest on its savings account.
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Preference Shares to Institutional Depositors
The lender said that in lieu of eligible deposit balance, institutional depositors will get preference shares (80 per cent) and equity share warrants (20 per cent). The warrants will be converted into equity shares at the time of IPO of the bank. The bank said, “Our shareholders are committed to infuse over Rs 3,000 crore of capital through cash and warrants, which will help build the bank’s strong foundation, recruit the right talent and bring in the best of technology to deliver a seamless digital experience. Will be used. We are committed to serve various customers and businesses by developing innovative banking products.”
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Finance Ministry issued notification
“Ministry of Finance approved and notified the amalgamation plan of PMC Bank with Unity Bank by issuing a gazette notification dated January 25, 2022,” the bank said. PMC Bank has about 110 branches and will be operated by over 1,100 employees as Unity Bank.
When will the depositors get their money?
According to the scheme, all eligible depositors will get an amount up to Rs 5 lakh under the Deposit Insurance Credit Guarantee Scheme (DIGC) in the first phase of payment. Thereafter, the balance amount will be paid to him gradually over a period of next 10 years. During this, the depositors will get an amount ranging from Rs 50,000 to Rs 5.5 lakh in the first year to the fifth year and the remaining amount will be available at the end of the 10th year.
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