Laxman M (LM) Kamble, general manager (GM) at scam-hit Punjab and Maharashtra Cooperative Bank (PMC Bank), who has been at the target of a lot of questions about his role, resigned from the bank on 31st October.
Mr Kamble was a GM at the urban banks department (UBD) at Reserve Bank of India (RBI) right until he joined PMC Bank and had even inspected the bank on behalf of the RBI in 2006-07, and, according to our sources, continued to inspect the bank until 2009.
Mr Kamble sent an email to all his colleagues at PMC Bank bidding goodbye with a “heavy heart”. He also expresses confidence that the days of hardship would pass and the bank would start “normal functioning”. It is unclear how this can happen.
Documents available in the public domain and being shared by affected depositors indicate that Mr Kamble had been issuing circulars with regard to KYC and other matters, on behalf of the bank until 25 October 2011
A PMC Bank annual report for FY2006-2007 mentions that "...Statutory inspections under section 33 of the Banking Regulation Act for applicable as cooperative societies was conducted for the period from 1 April 2006 to 31 March 2007 by Shri LM Kamble, GM, UBD, RBI. The inspectors have made various suggestions during the course of the inspection for improvement of the bank's working. We are grateful to the inspectors for the valuable suggestions made by them."
And yet, the PMC Bank annual report lists him as GM during FY2011-12.
This raises serious questions about how a GM level officer, in charge of PMC Bank’s inspection was permitted to make the switch, in the light of RBI regulations.
Section 37A of the RBI (staff) regulations seems very clear on this issue. It says, "No officer of the (Reserve) Bank, who has ceased to be in the Bank's service, whether by retirement, resignation or otherwise, shall within a period of two years from the date he finally ceases to be in the Bank's service, accept or undertake 'commercial employment' (as defined in section 2 of the Regulation 37A of the Staff Regulations) except with the previous sanction in writing of the governor subject to the proviso to the said Regulations."
Further, there are strict checks before the officer can be granted permission to accept or undertake commercial employment. The criteria to be ensured before granting the permission, says, "The ex-officer has not, in any way, dealt with the prospective employer while in service of the (Reserve) Bank, so as to give rise to a reasonable suspicion of having shown any undue favour to the latter. The officer, by virtue of his official contacts with the prospective employer has not unduly influenced the latter in securing the job (this could be ensured by going through cases disposed of by the concerned officer."
It would be pertinent to know on what grounds was his move to PMC Bank cleared and by whom.
There is another interesting angle to Mr Kamble’s tenure. It may be recalled that two RBI credit societies – one for the staff and another for the officers have an investment of just over Rs100 crore each in PMC Bank, which is frozen after the bank was put under strict directions on 24 September 2019.
Mr Kamble, during his tenure at the RBI used to be the vice chairman of the RBI Officers Credit Cooperative Society. This has led to speculation about whether it was he who persuaded this society to maintain hefty deposits with PMC Bank.
Moneylife messaged Mr Kamble asking about his resignation, how he missed such a massive scam, his quick move from RBI to PMC Bank and whether he had any role in persuading the RBI credit cooperative society to maintain deposits with the bank.
Mr Kamble responded by saying that he would reply in a day or two. This article will be updated when we hear from him.
Moneylife learns that many RBI officers are also upset about Mr Kamble’s failure to blow the whistle on this big fraud and how much did he know about what was going on.
As GM of PMC Bank, he was at the second highest level of seniority at the bank after the managing director Joy Thomas, who has been arrested by the police.
Those sympathetic to him say that splitting loans so that they are below the RBI’s inspection threshold is a new kind of scam, which was missed by RBI inspectors who completed inspections in 15 days with a team of three people. These officers depend on the submissions of the internal auditors and statutory auditors and targeted audits are undertaken only when there is a specific complaint.
This is not entirely true. We do know that in case of Infrastructure Leasing & Financial Services (IL&FS), the RBI had ignored formal complaints from foreign institutional investors as well as messages sent to the then RBI governor. Only an independent investigation will reveal what really happened.