Mumbai, October 15: The Shiv Sena on Tuesday urged the Reserve Bank of India (RBI) to merge the crisis-hit Punjab & Maharashtra Cooperative Bank with a larger public sector or private lender.

The RBI appointed administrator on PMC Bank, hit by an alleged Rs 4,355 crore scam, last month and imposed restrictions on withdrawal of funds.

Depositors of the bank have been protesting, seeking their money back. PMC Bank Fraud: Suspended MD Joy Thomas Became Junaid Khan as He Converted to Islam to Marry His PA, Co-Owns 10 Properties With Second Wife.

In memorandum to the RBI, Sena leaders including Union minister Arvind Sawant and MPs Gajanan Kirtikar, Rahul Shewale and Anil Desai said the Central bank should consider merging PMC Bank with a PSU or private bank such as Punjab National Bank, Bank of Baroda or ICICI Bank.

Real estate firm HDIL, which is PMC's Bank's main borrower, has quality assets which have been provided as collateral, the Sena leaders said in the memorandum.

"We are of the opinion that acquiring the bank will find sufficient value in the merger. We request you to accord this top priority to restore customer confidence in the banking system," the memorandum said. It cited past examples such as merger of Sangli Bank with ICICI.

"You may consider requesting state and central governments for recapitalisation of the bank. The RBI should also consider lifting direction to the bank based on assurance/indemnity provided by the big/bulk depositors so that the bank can revive by undertaking its day to day operations. The depositors can be asked to give assurance /indemnity to the effect that they would not withdraw for a period of three to five years," the memorandum said.

The party also asked the RBI to strengthen its inspection processes by deploying more skilled staff. The insurance cover for deposits should be increased from Rs one lakh to Rs five lakh, the party said.