The Reserve Bank of India on Monday said it has given "in-principle" approval to one Centrum Financial Services Ltd (CFSL) to set up a small finance bank (SFB), which will take over the beleaguered Punjab and Maharashtra Cooperative Bank (PMC Bank) very soon.

After the submission, Senior Counsel Jayant Mehta representing RBI sought time to file an affidavit in this regard.

The Bench of Justice DN Patel and Justice Jyoti Singh on Monday, after taking note of the submission on behalf of the RBI adjourn the matter for August.

To launch the SFB, the Centrum Group has formed an equal joint venture with Resilient Innovations, an arm of Gurugram-based BharatPe. But Centrum Capital will be the promoter of SFB, under the prevailing laws.

The joint venture will infuse Rs1,800 crore capital into PMC, Jaspal Bindra, executive chairman of Centrum Group had said.

Advocate Shashank Deo Sudhi who appeared for the petitioner submitted that more than five dates had been given and the hardship money had not been released. He further submits that the common depositors are condemned to lead humiliated life without any money at the time when the depositors are in the need of money.

The interim application was filed in the pending petition filed by Bejon Kumar Misra, challenging withdrawal limits in Punjab and Maharashtra Cooperative (PMC) Bank.

Earlier, RBI in a response filed in Delhi High Court stated that depositors are already allowed to withdraw up to ?5 lakh on hardship grounds for treatment of terminal illnesses, including treatment of COVID-19. It is the duty of Punjab Maharastra Cooperative (PMC) to pay hardship amount to the eligible depositors as per directions of RBI and subject to availability of liquidity with that bank. To expedite the process, the authority for approving the payment under hardship grounds has also been delegated to the PMC Bank, states RBI reply in Delhi High Court.

Earlier, Delhi High Court had directed the Reserve Bank of India (RBI), Punjab Maharashtra Cooperative Bank and other respondents to consider the needs of the depositors during the coronavirus-induced lockdown. The RBI had capped the deposit withdrawal limit at Rs40,000 and restricted the activities of the PMC Bank after an alleged fraud of Rs4,355 crore came to light.

In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including cap on withdrawals by customers, after detection of certain financial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

The Enforcement Directorate (ED) has seized and identified movable and immovable assets worth more than Rs3,830 crore owned by HDIL in connection with the case.

As of March 31, 2020, PMC Bank's total deposits stood at Rs10,727.12 crore and total advances at Rs4,472.78 crore. Gross NPAs were at Rs3,518.89 crore at end-March, 2020.