Mumbai Andheri resident Dipavali Naik, 67, held an account at the now defunct Punjab and Maharashtra Co-operative Bank for more than 30 years – the family’s life savings went there deposited, ensuring her and her husband Ulha a comfortable life in retirement.
Three years ago, the Naiks’ lives took an unpleasant turn when the bank’s fraud came to light. Since then, the couple has survived by borrowing from relatives and friends, who have also reached their limit. Taking a loan is not an option as the Naiks don’t know if they will be able to repay it.
Dipavali needs dental and shoulder surgery; both have been postponed. There is not enough money for their medicine and to run the household. Their medical and life insurance policies also lapsed, as they could not pay the premiums.
“We have worked hard throughout our lives to ensure our financial independence in our old age, but instead we have to depend on others not to be wrong,” Dipavali said.
She is just one of nine lakh PMC Bank depositors who have lived through the pandemic without access to their savings. Three years after their accounts were frozen, depositors received a roadmap that assures them access to their funds only after 10 years, without interest during this period.
Depositors are currently battling in court, calling the proposed merger with the new Unity Small Finance Bank (USFB) unfair, especially as 37% of them are elderly.
In the past, the PMC Bank Depositors’ Association has pointed out that the bank’s assets, including cash reserves, are sufficient to cover 80-90% of total liabilities.
Association member Nikhil Vora pointed out that the bank’s total assets are worth ₹5,590 crores while all depositors’ accounts amount to a total of ₹4,835. “Instead of liquidating these assets for the benefit of the depositors, the Reserve Bank of India (RBI) has taken decisions that have harmed us all. Not only has our money been blocked, but accrued interest is not considered when developing repayment plans,” Vora said.
Having been unable to provide a satisfactory solution to the problem, the RBI proposed a merger program in December 2020. Unity Bank, a joint venture between Centrum Group and Bharat Pe, took over PMC Bank in January 2022; all of its branches were turned over to the USFB, with a 10-year plan to return depositors’ money. Hurt and angered by the new plan, the filers have now approached the Bombay High Court against the proposed merger, calling it unfair.
Centrum Group Executive Chairman Jaspal Bindra said, “We are just executing the cabinet committee plan on the recommendation of RBI. He added that they have even come up with a one-time dues settlement system.
This scheme has also drawn a lot of criticism from depositors especially for recovering a huge chunk of their deposits. Beautician Pramila Sharma is a good example. She is a single mother of three children, including a disabled son. She took this diet a few months ago when her mother passed away.
“I remember that I had more than ₹1,35,000 deposited in the bank in 2019. After availing this scheme, I was given ₹1.01,500. Bank executives have no clear answer as to why I did not receive the full amount,” she said.