The central government on Tuesday sanctioned and notified the proposed merger of Punjab and Maharashtra Co-operative Bank Ltd (PMC Bank) with Unity Small Finance Bank Ltd. (USFBL).

The merger will become effective from the date of notification of the scheme – 25th January 2022. All branches of PMC Bank will operate as branches of Unity Small Finance Bank Ltd from this date, the RBI said.

“The USFBL is making the necessary arrangements to implement the provisions of the program,” he said. Unity SFB is a joint venture between Centrum Group and BharatPe. It started its activities as a small financial bank (SFB) from November 1st.

The Scheme of Amalgamation notified on Tuesday provides for the takeover of PMC Bank’s assets and liabilities, including deposits, by the USFBL in accordance with the provisions of the Scheme. Following the merger, PMC Bank depositors will get their money back over a period of 3 to 10 years. He said the beneficiary bank (Unity) will first make payment up to Rs 5 lakh or less received from DICGC to eligible depositors.

For the remaining amount, the bank will pay up to Rs 50,000 above the payment already made after two years, followed by an amount of up to Rs 1 lakh after three years, Rs 3 lakh after four year. years and Rs 5.5 lakh after five years.

The RBI said the entire remaining amount will be paid after 10 years.