Unity Small Finance Bank said around 96% of depositors having deposits up to Rs 5 lakh will be paid upfront, subject to completion of the requirements as per the Deposit Insurance and Credit Guarantee Corporation (DICGC).

These depositors can choose to either withdraw or retain this amount with Unity Bank; or make additional deposits, and take advantage of the attractive interest rate up to 7%, being offered on savings accounts. 

About 30,000 depositors with high-value deposits will, however, get their money paid periodically over ten years. Their deposits will earn interest rate of only 2.75% after the 5th year from the implementation of the scheme.

Additionally, institutional depositors will receive preference shares (80%) and equity share warrants (20%) in lieu of their eligible deposit balances. The warrants will be converted into equity shares at the time of the bank’s initial public offering (IPO), giving them a potential equity upside, Unity Bank said.

Set up as a 51:49 joint venture between Centrum group and payments app BharatPe, Unity SFB said it will repay the full principal amount due to all depositors, as per the scheme of amalgamation sanctioned by the Ministry of Finance. The amalgamation of PMC Bank with Unity SFB will, thus, prevent a liquidation of the scam-hit and cash-starved co-operative bank.

PMC Bank’s  110 branches and over 1,100 employees will operate as Unity Bank, providing “security and stability in their employment” along with offering uninterrupted service to clients. 

“Our shareholders have committed capital of over Rs 3,000 crore through cash and warrants, which will be utilised to build a strong foundation for the bank, hire the right talent and bring best in class technology to deliver a seamless digital banking experience. We are committed to building new age banking products, catering to a diverse set of customers and businesses," Unity Bank said in a release.

Unity SFB commenced operations on November 1, after getting approval from the Reserve Bank of India on October 12, 2021.

On January 25, 2022, the ministry of finance sanctioned and notified the amalgamation scheme of PMC Bank with Unity Small Finance Bank.

In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions after detecting certain financial irregularities. The restrictions included a cap of Rs 100,000 on withdrawals by its customers.

As per the scheme of amalgamation, Unity SFB would take over the assets and liabilities of PMC Bank, including deposits.

Unity SFB has been set up with a capital of about Rs 1,100 crore as against the regulatory requirement of Rs 200 crore for the setting up of a small finance bank. As per the scheme, equity warrants of Rs 1,900 crore, to be exercised anytime within a total period of eight years, have been issued by Unity SFB on November 1, 2021, to the promoters to bring further capital.