MUMBAI: The Economic Offences Wing (EOW) on Monday registered an FIR against more than 10 people, including Joy Thomas, former MD of Punjab & Maharashtra Cooperative Bank, Waryam Singh, ex-chairman of Punjab & Maharashtra Co-operative Bank, and HDIL promoters Rakesh and Sarang Wadhawan. The complaint was filed at the instance of the RBI-appointed administrator who has put the loss caused to PMC Bank through cheating at Rs 4,355.5 crore. Lookout circular notices have been issued against all accused as a preventive measure so that they can’t flee the country.
According to RBI sources, a large chunk of the bank’s loans were illegally advanced to HDIL, violating RBI norms on exposure limit. These loans turned bad, putting the bank’s deposits at risk. The bank had managed to hide these loans by diverting deposits to 40 to 45 accounts.
“The loans granted were adjusted on the book of accounts against 21,000 account holders showing loan against FDs. Moreover, all the 21,000 accounts are fictitious,” said a source.
PMC Bank’s illegal loans to realtors, hoteliers began in 2008
PMC Bank’s loans that were illegal and that went bad were granted to companies and individuals in 2008-19. The violations were on several counts: PMCB went beyond borrower and sectoral limits, lending more to real estate firms than it was supposed to, and hid the loans in fake accounts.
“We have received a complaint,” said EOW chief Rajvardhan Sinha. EOW has formed a special investigation team to probe the case.
Besides PMC Bank’s former MD and former chairman, others named as accused in the FIR include: several accused from its board of directors and officials; other promoters and executives of HDIL, Serveall Constructions, Sapphire Land Development, Emerald Realtors, Avaas Developers, Prithvi Realtors and Hotels; and unknown persons. The accused have been booked for cheating, forgery and criminal conspiracy under the IPC. RBI in 1984 had granted licence to PMC for banking. By 2014, PMC had become a countrywide cooperative bank with branches in seven states.
The bank’s board was superseded by RBI, which appointed J B Bhoria as administrator. The bank is facing restrictions on operations with withdrawals limited at Rs 10,000 per customer.
Last week, RBI imposed restrictions on the withdrawal limit of account holders and capped it at Rs 1,000. This led to mass panic among investors and hundreds of housing societies which have accounts in PMC. The withdrawal limit was then raised to Rs 10,000. NGO Consumer Action Network has filed a PIL at Bombay high court challenging the withdrawal caps.
On Bhoria’s instructions, a PMC Bank manager filed a complaint at EOW on Monday. There are more than 9.12 lakh depositors who have lost money in the scam. “These depositors have in all more than Rs 11,618.34 crore (up to March 31, 2019) in their accounts.
It will be a lengthy investigation to find out what documents were submitted by fictitious account holders and who created these accounts. The police will be focusing on the money trail and where loan money, granted and taken by the accused, was utilised.