Unity Small Finance Bank plans to run down the erstwhile Punjab and Maharashtra Co-operative (PMC) Bank’s loan book of about ₹800 crore even as it focuses on growing its micro finance and MSME (micro, small and medium enterprises) loan portfolio.
Scam-hit PMC Bank’s loans, aggregating about ₹800 crore, are now part of Unity SFB’s loan portfolio following amalgamation of the former with the latter, effective January 25.
Unity SFB is promoted by Centrum Financial Services Ltd (Centrum) with Resilient Innovations Pvt Ltd (BharatPe) as a joint investor.
Jaspal Bindra, Executive Chairman, Centrum Group, said: “Our loan book, including PMC Bank’s good book of about ₹700-800 crore in the form of home loans, two-wheeler loans and some corporate loans, is now about ₹2,700 crore. Obviously, we can’t add PMC Bank’s bad book, which is very big. About 70 per cent of our loan book, comprising micro finance and SME loans in equal proportion, has come from Centrum.”
In an interaction with BusinessLine, Bindra observed that PMC Bank’s loan book will be run down to zero because that is not the business Unity SFB wants to do.
PMC Bank’s loan portfolio
“PMC Bank’s book comprises wholesale, real estate loans, urban home loans and loans given at 7-8 per cent interest. Our cost of funding is higher than that. We cannot support that. So, as the loans mature, we will run that book down.
“If we can sell PMC Bank’s loans prematurely, we would do so. But one way or the…
