The restrictions on Punjab and Maharashtra Co-operative (PMC) Bank will continue for another three months till end-March.

The Reserve Bank of India (RBI) has extended the restrictions as further action on the draft scheme for the takeover of the scam-hit bank by Unity Small Finance Bank (USFB) is in process.

The central bank had prepared a draft scheme of amalgamation, which was placed in public domain on 22 November for seeking suggestions and objections from members, depositors and other creditors of PMC Bank and USFB. The deadline for submitting the comments was till 10 December.

Further action with regard to sanction of the scheme is under process, the RBI said on Tuesday as it extended the restrictions for another three months till 31 March, 2022, subject to review.

In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including a cap on withdrawals by its customers. This action was taken after the RBI had detected certain financial irregularities, including hiding and misreporting of loans given to real estate developer HDIL.

The RBI has extended the restrictions on PMC Bank several times since then. The directions were last extended in June till 31 December.

As per the draft scheme of amalgamation, USFB will take over the assets and liabilities of PMC Bank, including deposits, thus giving a greater degree of protection for the depositors, RBI had said last month.

USFB, promoted by Centrum Financial Services along with Resilient Innovation as 'joint investor', was granted a banking licence in October 2021. USFB started functioning on 1 November.