PMC Bank Fraud: Forensic Audit Reveals Rampant Violation of Rules; RBI Committee, ED, EOW To Sell HDIL Assets

Moneylife Digital Team 18 November 2019

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.

#TheBigStory: #PMCBankScam gets bigger. According to the Forensic Audit report, the amount of the scam has crossed ?5000 crore as compared to ?4000 crore. The report also shows that each rule was violated@Santia_Gora and @nehakulkarni29 with details@saharzaman pic.twitter.com/bYVrQZGIOR
— Mirror Now (@MirrorNow) November 18, 2019

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.

Comments

User

DeepakSB

3 years ago

Hindustan Times-Mumbai-20-Nov-2019-Page No.1-Headlines-at PMC,RBI confirms that Tempering of Core Banking system was done by some "BANK EMPLOYEES "

Amarjit Singh

3 years ago

But Bank employees is good in services

manojkamrarti

3 years ago

Special status to urban cooperative banks is like Section-370 of Jammu and Kashmir. No vital BR Act provisions apply to UCBs giving full freedom to commit scams.

So GoI should immediately remove special status to UCBs to stop further scams by repealing corrupt sections, subsections inserted in 1984, 2013 by amending the Act.

Nakul Kumar Reddy

3 years ago

First they have to sell their all assets,they will know the pain of public assets.

Dr Benoy Kumar Chattapadhyaya

3 years ago

What about RBI? This Institutions also Frauder. They have Frauded me Rs.1,34,700 by RBI Official Mr. Sameer Singh Head Customer Consumer Forum RBI New Delhi for transferred of my Fund which is under Custody of RBI. Still it is pending they have not send my Fund nor Refund my money what ever I have send to RBI. Matter has been reported Governor RBI no action has been taken nor given any reply to me. It has been came through [email protected]

Sucheta Dalal

Replied to Dr Benoy Kumar Chattapadhyaya comment 3 years ago

Afraid you have been scammed by a digital fraud. RBI is a regulator and monetary authority and does not do any of the things you are accusing it of. Moreover the email you have mentioned is a fraudulent email. You need to file a police complaint. There is nothing like a "customer forum" of RBI in delhi. In fact, the RBI issues frequent warnings about the misuse of its name.

DeepakSB

3 years ago

https://www.saraswatbank.com/content.aspx?id=Long-Term

DeepakSB

Replied to DeepakSB comment 3 years ago

Ms. Dalal.... Awaiting your comments and expert guidance on long term deposits issue. Thanks.

DeepakSB

3 years ago

RBI has officially given licence to co-operative banks to loot and cheat its account holders.

As of Nov 2019-PMC Bank scam and other co-operative bank scams are daily reported in press and media.

(Pdf file attached-terms and conditions of Long Term Deposits -LTD-by Saraswat Bank-with permission of RBI).

RBI link for long term deposits.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10487

Its surprising that these LTDs are NOT covered by Bank Deposits Insurance scheme (DICGC).

No loan/Overdraft/Premature withdrawal available till 7 years.

If CO-Operative bank closes down/liquidated during tenure of 7 years of LTDs (long term deposits )-depositor will LOOSE ALL AMOUNT.
ðŸš’ðŸš’ Can any Individual/Organization/Consumer Forum study these and file PIL to stop further cheating by co-operative banks of its account holders? ðŸš’ðŸš’

Nakul Kumar Reddy

3 years ago

Pmc bank total assets put in to auction.