the goan I network
MARGAO
Days after the Reserve Bank of India (RBI) imposed stringent restrictions on the bank’s financial transactions, the Madgaum Urban Cooperative Bank (MUCB) on Sunday set in motion the process for the merger of the bank with the Punjab & Maharashtra Cooperative Bank (PMC).
MUCB senior officials, however, pointed out that the process is just the beginning and it may take months -- around 8 to 10 -- before the merger proposal is accepted by the PMC board as well as the MUCB board.
This is perhaps the second time in the last one year that the MUCB and PMC has explored the possibility of the merger of the former with the latter. Though the PMC officials had evinced keen interest in the merger proposal then, the proposal did not move forward for the simple reason that the MUCB Board was hoping intervention by former chief minister Manohar Parrikar to bail out the bank, but in vain.
Sunday saw auditors engaged by the PMC descending at the MUCB’s head branch at Aquem as part of the exercise to ensure the merger of the Margao-headquartered bank with the PMC. While the team of auditors arrived on Sunday morning for discussions at MUCB’s Aquem branch, the MUCB team was led by Managing Director Kishore Amonkar and others.
After the auditors panel left the branch, the MUCB managing director Kishore Amonkar told The Goan that the two sides has set in motion the “due diligence” process for the ultimate merger of the Madgaum Urban Cooperative Bank with the Punjab & Maharashtra Cooperative Bank.
“This is just the beginning. The process may take up to 8-10 months for the merger proposal to fructify”, he said, while exuding confidence that everything would work well for the MUCB.
To a query, Amonkar said the Auditors, after conducting a study of the financial position, will get back to the PMC
Board, before a final decision is taken on the merger. “If the merger finds proposal favour with the PMC, a draft Memorandum of Understanding (MoU) will be prepared and sent to the MUCB for approval. The MoU will be placed before the MUCB board and if approved, the stage will be set for the merger of the Madgaum Urban Cooperative Bank with the PMC”, Amonkar said.
The RBI had last week issued a host of directions to the Madgaum Urban Cooperative Bank, imposing curbs on the financial transactions, creating scare amongst the 55,000 depositors as they will be allowed to withdraw an amount of Rs 5000 only from their savings or current account.
Depositors looking forward for maturing of their fixed deposits have also been left in the lurch with the RBI directions mandating the MUCB to renew the existing term deposits on maturity.
Issuing directions under section 35A of the Banking Regulation Act, the Reserve Bank of India has barred MUCB from granting or renewing any loans and advances, make any investment, incur any liability, including borrowing of funds and acceptance of fresh deposits without the prior approval of the Bank.
The MUCB has been further barred from disbursing or agree to disburse any payment whether in
discharge of its facilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets.
These directions shall remain in force for a period of six months from the close of business on May 2 and are subject to review.
