Large value depositors of the erstwhile Punjab and Maharashtra Co-operative Bank (PMC) can expect a faster payout according to the final notification of the bank’s restructuring plan by the government.

According to the draft scheme, the first pay-out for retail depositors above Rs 5 lakh will start from year one, faster than the second year pay out as per the draft scheme.

Instititutional depositors can also expect a preference shares alloted to them in case recoveries from the major fraud account of HDIL Group exceed the principal.

PMC Bank, a multi-state cooperative lender, collapsed dramatically in September 2019 after an audit revealed that the bank hid loans of Rs 5,697crore to the HDIL Group and its promoters Sarang and Rakesh Wadhawan. The RBI put restrictions on deposit withdrawals and stopped the bank from issuing fresh loans.

Last year, the RBI approved PMC Bank’s takeover by Unity Small Finance Bank a joint venture between Centrum Group and BharatPe. The government notification on January 25 has notified the take over.

According to the final scheme, institutional depositors can convert 20% of deposits into equity shares when Unity SFB goes public.

To be sure, small depositors having deposits of less than Rs 5 lakhs being paid-off immediately constitute about 95% of the depositors.

The first payment of Rs 5 lakh to all depositors will be made as soon the Deposit Insurance and Credit Guarantee Corporation (DICGC) transfers the funds. Further, at the end of the first, second, third, fourth and fifth years, retail depositors will receive additional ₹50,000, ₹50,000, ₹1 lakh, ₹2.5 lakh and ₹5.5 lakh, respectively. Overall, nearly 99% of the retail depositors will be fully paid off by the end of five years.