Cooperative industry body Sahakar Bharati said it would approach the Supreme Court, along with depositors and associations of Punjab & Maharashtra Bank, to oppose the rescue plan for the lender.
In a statement released on Wednesday, Sahakar Bharati said it was “saddened and shares the anguish” of the cooperative lender’s depositors’ who have been cheated.
The industry body said it would approach the Supreme Court to take suo moto cognisance of “the hardships PMC depositors are facing on account of long lock-in period of minimum 10 years and ridiculous low rates of interest ranging from 1% to 2.75%”.
These provisions were notified as part of the scheme of amalgamation of PMC Bank with Unity Small Finance Bank earlier this week. Through this plan, Unity Small Finance Bank would take over the assets and liabilities of PMC Bank.
Sahakar Bharati has sought that the resolution scheme be reviewed by the government and the Reserve Bank of India in public interest. The industry body has asked that the lock-in period for depositors be reduced to five years and the depositors be paid a minimum interest rate of 6% during this period.
Speaking to BloombergQuint on Tuesday, Dipika Sahani, the coordinator of PMC Bank Account Holders Forum, had said the association was looking at legal recourse in the matter.
The approved amalgamation plan allows retail depositors of PMC Bank to be repaid up to Rs 5 lakh insured by the Deposit Insurance Credit Guarantee Corporation, immediately. For those with outstanding deposits higher than Rs 5 lakh, the plan allows for repayment over 10 years, depending on the value of the deposits.
For institutional depositors, 80% of the outstanding deposits would be converted to perpetual non-cumulative preference shares, while the rest would be converted to equity warrants. The PCNPS would be repaid from the cash recoveries in the Housing Development & Infrastructure Ltd. Group account, after 10 years of the resolution.