The preliminary forensic audit report of Punjab and Maharashtra Cooperative Bank (PMC Bank) submitted by Grant Thornton, a leading auditor firm commissioned by the Reserve Bank of India (RBI), exposes rampant violation of loan sanctioning norms by the Bank. The economic offences wing (EOW) of Mumbai police had submitted the report to the court. The report also suggests that Housing Development Infrastructure Ltd (HDIL), and its promoters the Wadhawan family, obtained loans from the Bank without adequate security, say reports.
The size of the scam has gone up as a result. The preliminary report shows that PMC Bank never showed HDIL as a bad loan or non-performing asset (NPA) and the Bank created fictitious accounts to grant loans to the Wadhawan company.
Separately, a report by Moneycontrol.com
says, the RBI, Enforcement Directorate (ED), EOW and administrator of PMC Bank have formed a coordination team to expedite action in this case.
"On Monday, RBI governor Shaktikanta Das, ED director Sanjay Kumar Mishra, Mumbai Police Commissioner Sanjay Barve and PMC Bank administrator JB Bhoria met at the RBI headquarters to discuss next steps in the case. After seeking court approval, the RBI will direct the PMC Bank administrator to begin the process of sale of assets under the SARFAESI Act," the report says.
Last week, the EOW arrested Rajneet Singh, son of Sardar Tara Sing, former member of legislative assembly (MLA) from Mulund in the PMC Bank fraud case. Rajneet Singh was director of PMC Bank before the RBI put restrictions on the lender. He was also on the recovery committee of the Bank.
The EOW had also arrested Jayesh Sanghani and Ketan Lakdawala, the two auditors who did the statutory audit of fraud-hit PMC Bank.
Last month, the ED had seized and identified movable and immovable assets worth more than Rs3,830 crore owned by HDIL, the company directors and promoters, as well as official of PMC Bank and others related entities in the fraud case.
The PMC Bank has been put under restrictions by the RBI since September after an alleged Rs4,355 crore scam came to light, following which the deposit withdrawal was initially capped at Rs1,000, causing panic and distress among depositors. The withdrawal limit has been raised in a staggered manner to Rs50,000.
Founded in 1984 by S Gurcharan Singh Kochhar from a small room in Mumbai, the Bank had now grown to a network of 137 branches in six states and ranked among the top 10 cooperative banks in the country.