Bombay High Court upholds PMC Bank's merger with Unity Small Finance Bank
The Bombay High Court has upheld the 2022 merger of Punjab and Maharashtra Cooperative (PMC) Bank with Unity Small Finance Bank. Petitions challenging the amalgamation were dismissed, with the court ruling that the scheme benefited depositors and served public interest. Meanwhile, Unity's financial growth has surged since the merger, with assets and profits rising sharply.
The court rejected claims that the merger was arbitrary or unfair. It stressed that each bank crisis must be judged individually, making comparisons with other cases irrelevant. Liquidating PMC Bank would have left depositors with only Rs 5 lakh per account, regardless of their total savings.
Under the approved scheme, depositors received 100% of their principal plus permissible interest. By December 31, 2025, 99.45% of PMC Bank's depositors had withdrawn Rs 3,835.04 crore of the Rs 3,856.26 crore released by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Since the merger, Unity Small Finance Bank has expanded rapidly. Its balance sheet grew from Rs 11,946 crore in March 2023 to Rs 19,152 crore by March 2025. Profits also climbed from Rs 35 crore to Rs 482 crore in the same period. The bank's network now spans 291 branches across 20 states, up from just 110 branches before the merger.
The merger has secured full repayment for nearly all PMC Bank depositors while strengthening Unity's financial position. The court's decision confirms the scheme's legality and its role in protecting depositors' funds. Unity's expansion continues, with a broader presence and improved profitability since the takeover.
