Sahakar Bharati, an umbrella body for cooperative societies founded by Reserve Bank of India (RBI) board member Satish Marathe, on Wednesday announced that it would file a petition in the Supreme Court against implementing the final scheme of amalgamation between Punjab and Maharashtra Co-operative (PMC) Bank and Unity Small Finance Bank (SFB), approved by the government on Tuesday.

The Sahakar Bharati, led by aggrieved PMC Bank depositors, in a press release, stated that the terms of the merger are "one-sided and unfair to depositors". The body requested the Centre and the RBI to reconsider the terms of the agreement that allow zero-interest payment against deposits for five years after March 31, 2021; a maximum of 2.75 percent interest paid on unpaid deposits after March 31, 2021; and a staggered payment to all depositors over 10 years.

The body has said that the maximum lock-in period should be five years for all depositors and a minimum interest of 6 percent should be paid to depositors during this period. Additionally, the depositors are also demanding that the deposit insurance and guarantee scheme of the Deposit Insurance and Credit Guarantee Corporation (DICGC) be invoked to provide liquidity support to the bank to make full repayments.

“Sahakar Bharati will take the lead, along with PMC depositors/associations, and will appeal to the Supreme Court to take suo moto cognisance of the hardships PMC depositors are facing on account of long lock-in period of a minimum of 10 years and ridiculously low rates of interest ranging from 1 percent to 2.75 percent," read the release.

The body has claimed that the stress at PMC Bank was "not a usual bank failure but a case of fraud". It further says that the depositors cannot be faulted for their judgement as they depended on published annual reports.

Meanwhile, another body of depositors -- PMC Bank Account Holder Forum -- has decided to move the high court against the terms of the merger. Dipika Sahani, PMC Bank Account Holder Forum Co-ordinator, told CNBC-TV18, "We are planning to file a petition in the Bombay High Court against the scheme next week. We will contest non-interest payment on deposits after March 31, 2021, for five years. We will also contest unfair treatment of deposit holders who were not consulted by RBI with reference to the amalgamation scheme."

Sahani added, "About 44,000 depositors with over Rs 5 lakh deposits will be affected by delayed payment. They want to be fully repaid within three years."

Earlier, on September 24, 2019, the PMC Bank was put under restrictions after it was found guilty of misreporting loans given to developer Housing Development and Infrastructure Ltd (HDIL).

According to the Centre-approved plan, Unity SFB will take over the assets, liabilities, branch network, and staff of the PMC Bank which had a deposit base of Rs 10,727 crore and loans worth Rs 4,473 crore as of March 31, 2020.

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(Edited by : Thomas Abraham)

First Published:Jan 27, 2022 11:26 AM IST