PMC Bank Wants Credit and Housing Societies to Lock-In Deposits for 3 Years
The management of fraud-hit Punjab and Maharashtra Cooperative Bank (PMC Bank) is seeking consent from credit societies, cooperative housing societies (CHS) and other institutions from the cooperative sector that they will not withdraw their bank deposits for next three years. This follows a similar undertaking sought from its own staff, which has accounts with the bank. 
 
Asking all branches to ensure compliance with its directive, the PMC Bank management says, "...the branches are advised to approach such customers (cooperative institutions) with a request to give their consent to keep the deposits during the next three years so that the Bank can approach the Reserve Bank of India (RBI) to remove the restrictions."
 
The communication sent from PMC Bank's central office to all branches mentions about a meeting between the administrator and representatives of credit societies and federations. "In the event the Bank starts normal operations, the Bank may face liquidity crunch and hence, in order to overcome such situations, the representatives agreed that the cooperative credit societies, housing societies and the banks that have substantial deposits with PMC Bank will not withdraw the deposits during the next three years..," it says.
 
 
The PMC Bank management has also made it clear that this consent should be voluntary. The branches are asked to verify signatures on the consent letter and send it to the central office for further processing. 
 
Sources say, if the proposal from the bank has come about after a discussion with the Reserve Bank of India (RBI) then the two RBI employee societies, which have over Rs200 crore with the bank, may also be asked to lock-in their deposits in PMC Bank. 
 
It would be interesting to see if any of these developments are part of the RBI’s response to the Bombay High Court in the affidavit it was asked to file in response to several writ petitions and public interest litigation (PIL) with regard to the PMC Bank issue. The next date of hearing is 19th November. 
 
Few days ago, Moneylife wrote on how PMC Bank is asking its staff depositors to give a declaration that they will not withdraw their personal deposits with the bank for a period of three years, even if restrictions on withdrawal are lifted by the regulator. (Read: PMC Bank Fraud: Management Seeks Undertaking from Staff that They Will Not Withdraw Deposits for 3 Years
 
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, in 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.
 
 
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    COMMENTS

    Nagaraju Bommanahalli

    4 weeks ago

    I will ask both both parties please reply ,how much money recovered till today by selling assets of fraud persons who taken huge fraud loans,how much money returned to the bankrupted bank account holders , don't do drama,my friend lost several lakhs from Alpic finance a NBFC in twenty five years back, but till today he have not received single paise , this Alpic finance company is a subsidiary of Cipla group, this NBFC done huge fraud,but till today no action taken, these companies go to court and take stay order for the sale of theirs assets, Court will drag the case to twenty to thirty years at that time all investers will die, these fraudessters enjoy our loot money with political leaders, these are all drama nothing will happen only poor will die , why not Auditors arrested who have been submitting manuplated Audit reports by fabricating balance sheets. Even concerned officials from RBI are also equally liable for this situation. We need to initiate proper legal steps to compel RBI to immediately resume normal operations of Bank.In past history no business man who had taken huge fraud loans are not punished by court,ask these RBI give the list of who had punishment for such crime in India, nothing only poor people are finished from these fruduster, former finance minister chidambaram who had made banks to give loans by phone calls is getting bail after bail from all courts ,his son has thousand crores money in foreign country, these money has gave by Vijay malya like business men for getting fraud loans,no hope for our India , UPA gave 70%fraud loans , NDA has gave 30%fraud loans,one is 840and another is420, this is only difference, both parties taking India to bankruptcy,no hope for common people
    In India nobody knows how Indian companies are doing fraud from the beginning to last ,for example a big business men will start the company in India as below .His companies actual value is Rs2000crores but with the help of the auditors,Banks,and chartered accountants he made his company s values to RS 6000 crores by book adjustment with bribe and he call IPO that is in share market and collect Rs10000 crores in share market, first he pumped 60%of money to foreign country in the name of business and will deposit most of the money in his name next he will file bankruptcy due to losses and will write off all the loans this is the business doing in India ED is doing drama ICICI Bank chandakochar is well known to all she done huge fraud in ICICI Bank, this drama of enquire is doing from past one year, but still she is not arrested, reasons In this icici bank scam all SEBI auditors ED RBI central government rating agencies big leaders of all parties involved.central government making all efforts to avoid arrest these fellows,if arrested all all foreign country become knows most of the Indian companies running on bogus and take away all foreign investment,then India become bankruptcy.This is well known by central government hence avoiding all efforts to arrest directors of icici bank chandakochar DHFL jetairways Videocon kingfisher airline PNB bank head [email protected] etc .even Vijaymalya kingfisher airline companies don't have single plane in his companies name but all banks gave Rs10000 crores money, same type loans gave to jet airways,DLF, Devan housing finance company,[email protected],fs,etc wait in few months most of the common people investment in icici bank NBFC PSU banks equity NCD mutul funds become Zero,All parties RBI officers, SEBI, etc are corrupt they are taking India towards bankruptcy.

    valentine barboza

    4 weeks ago

    Get the prime minister to answer the depositors of pmc bank issue... He is answerable!! The finance minister has washed her hands off by passing the buck.. plsFilé multiple cases Against the RBI for not doing it’s job.. all political parties are corrupt to the core.. all we will have is 1000 feet statues of all gods and political goons.. . but no money to buy food .. this is the fate of us poor Indians .. Vijay Mallya, Neerav Modi , Mehul Choksi!!! How many shahs and Modi’s will it take to kill us slowly? Why are these political thugs screwing the common man... ? Let’s say Jai sure ram...

    valentine barboza

    4 weeks ago

    RBI is responsible for this mess. Pls do not lock in ur deposits for 3 years.. this country and its systems are gone to dogs.. soon you shall see how many banks are going to close down.. look at DHFL.. over .. 20 thousand crores and no accountability.. this government is cheating us.. pls read money life and money control.. cobra... they are revealing the truth.. all other media is sold off.. do u c pmc bank news as often u used to c? No!! They r screwing the common man..

    HSBC, Its Ex-CEO Robert Milne & Executives Named in FIR for Defrauding Senior Citizens for Rs1.48 Crore
    The Mumbai police has finally registered a first information report (FIR) against The Hongkong and Shanghai Banking Corp Ltd (HSBC) India, its former chief executive officer (CEO) Stuart P Milne, Priya Paul, relationship manager and several top officials of the Bank and its subsidiary, Canara HSBC OBC Insurance Co, for defrauding a very senior citizen and his family. According to the FIR, one Priya Paul, who was relationship manager, sold 83-year Rusi Postwala and his family members several insurance policies by redeeming his investments in mutual funds, under the pretext of ensuring better return on investment. Mr Postwala, his wife Rusi and daughter Khushnuma Behram suffered a loss of Rs1.48 crore, as per the FIR. 
     
    The FIR, a copy of which has been seen by Moneylife, names Ms Paul, Ms Jhumar, head of premier banking at HSBC's main branch, Vaishali Chauhan, manager of the same branch, Chirag Jain, chief operating officer (COO) of HSBC main branch, Stuart P Milne (the then CEO) of HSBC India, Ramakrishna S, head for retail banking and wealth development at HSBC, Animesh Raizada, head for wealth management at HSBC and Mayur Patni, head for customer relations at the Bank.
     
    Initially, the Mumbai Police closed the file stating that there was no need to investigate the matter since no offence was made out. It was only when Mr Postwala and Ms Behram approached the State Police Complaints Authority, which observed and remarked that cognizable offences are made out in this case, the FIR was registered, after a gap of two years.
     
    Ms Behram, in her complaint says, "...the accused officials of HSBC Bank and Canara HSBC OBC Insurance Co, with an intention to obtain handsome commission had committed offences of forgery, fraud, cheating, criminal breach of trust by forging signature of my daughter in the proposal form and filing wrong information of myself and my father and misappropriation of funds of my father and myself to the tune of Rs1,47,57,837 crore..."
     
    Ms Behram, who is the daughter of Mr Postwala, filed the complaint. Describing the allegedly fraudulent ways used by HSBC officials, she says, "Around July 2013, Priya Paul informed my father in my presence that he should have a well balanced portfolio and since he already had equities and mutual funds, it would be better for him to put Rs5 lakh into insurance. When she realised that we were reluctant, she purposely misinformed us that it would be one time investment and would earn returns of about 8%, a comparatively safer option to investments in mutual funds. Ms Paul had intentionally never informed him that the insurance policy she was selling him was a recurring nature of five continuous years and his money would be locked for 10 years from the date of first premium."
     
    According to Ms Behram, the relationship manager from HSBC told the family that since Mr Postwala was 80 years old, he was not eligible for insurance and the additional side benefit would be given to them as life assured. Ms Paul then made Ms Behram and her two daughters to sign on two policies as life assured and made them to undergo medical tests for two policies. 
     
    Over the next year, Ms Paul continued to assure the family that she is handling the portfolio of Mr Postwala and they should not worry about it.
     
    When in 2013-14, Mr Postwala needed some money for investing in a new shop and for construction work at his property in Alibaug, he and the family, including Ms Behram, requested Ms Paul to liquidate his mutual fund investments. However, Ms Paul repeatedly told them that since their mutual fund investments are giving good returns they should sell their investment in shares. 
     
    However, when the family found that no interest or dividends were being received by them, they called Ms Paul for a meeting. During the meeting, Ms Paul told them that she had redeemed nearly all mutual funds of Mr Postwala and put all the money in two insurance policies. "We were shocked to know that Ms Paul had redeemed all of my father's mutual funds and diverted the monies to insurance policies without our knowledge. Unknown to us, she had been redeeming almost all of my father's mutual funds and investing this in more and more insurance policies and in turn to meet the premium demands for the same, she kept on redeeming more and more of mutual fund units," Ms Behram says.
     
    Then, on 20 March 2016, Mr Postwala and Ms Behram approached Ms Jhumar, head for premier banking at HSBC's Fort branch. During the meeting, Ms Paul admitted that she had invested in four policies and since she had redeemed all mutual fund investments, except one, of Mr Postwala, for paying premium of the policies, she liquidated mutual fund investment in one scheme of Ms Behram as well. Ms Jumar promised detailed enquiry in the matter, but nothing happened. In fact, Ms Behram says, "we called up Ms Jhumar many times as well as personally went to the bank a few times to meet her, but she refused to accept our calls or even meet us."
     
    When the family escalated the issue to the branch manager Ms Chauhan, they were promised the same things that were promised by Ms Jhumar. But there was no progress. 
     
    Ms Behram then asked the Bank for all her bank statements as well as those of her father for the period from 2012 to 2016. "On perusal of my father's bank statements, annual dividend and mutual fund statements, I noticed that all his mutual funds, except one, had been liquidated and monies received in his savings account been immediately used to pay premiums for Canara HSBC Life Insurance policies," Ms Behram says in her complaint. "One of my mutual fund investment was also redeemed and the redeemed amount of Rs1.50 lakh was paid to the same insurance company as premium for a policy," she adds. 
     
    According to the complaint filed by Ms Behram, there were a lot of discrepancies and wrong information, including personal details, income and health that was filled in the insurance policy documents. Ms Behram also found one know-your-customer (KYC) form supposedly filled by her, when she was not even present in India.  
     
    In addition, the HSBC Bank official had also withdrawn a sum of Rs31.30 lakh from the public provident funds (PPF) account of Mr Postwala, his wife Dhun and daughter Ms Behram on 22 April 2013. Value of these PPF investments would have been Rs45.09 lakh as on 12 March 2018.
     
    The family was also made to sell their shares worth Rs38.12 lakh, which would have been valued at Rs41.02 lakh as on date, including the dividends.
     
    Ms Behram and her father tried to escalate this issue with senior officials of HSBC Bank and Canara HSBC OBC Insurance Co as well as Reserve Bank of India (RBI), the Banking Ombudsman, and Insurance Regulatory Development Authority of India (IRDA). But they did not receive any response. 
     
    They succeeded in having the FIR filed due to the help they received from former Mr Mahesh Athavale, a former police officer and lawyers, who had worked in the economic offences wing (EOW) of Mumbai police and investigated several financial crimes.  
     
    Few months ago, they approached Moneylife Foundation, where counsellors suggested that the best recourse for them was to file police complaint to get justice. 
     
    Responding to Moneylife's mail, an official from HSBC says, "We value our customers and take seriously all concerns and issues raised by them. We are aware of this matter and have provided full support previously to the multiple investigating authorities that were approached by the customer. We are ensuring full cooperation to the ongoing investigation and remain committed to resolving our customer complaints fairly." 
     
    This is not the first time that officials of HSBC Bank have cheated its own customers. In March 2014, under pressure from the regulators, HSBC had settled and closed its five-year-old dispute with singer-actress Suchitra Krishnamoorthy.
     
    While the settlement did not permit her to reveal the amount, we learnt that this case of gross mis-selling and customer abuse was been amicably closed. Moneylife Foundation had relentlessly pursued this case for over two years. (Read: HSBC agrees to compensate Suchitra Krishnamoorthy)
     
    Moneylife published an expose in April 2012 on how HSBC looted Ms Krishnamoorthy for over five years by promising an extravagant assured return of 24% from mutual funds as well as insurance.
     
    In November 2013, market regulator SEBI sent a strongly-worded notice to HSBC asking the lender to explain why its acts in handling the portfolio of Ms Krishnamoorthy were not in violation of its regulations governing fraudulent and unfair trade practices and violation of the code of conduct governing mutual fund distributors.
     
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    COMMENTS

    KAVIRAJ B PATIL

    3 weeks ago

    To avail of locker facility, my relative opened an account with a large PSU bank. To avail locker, the manager insisted on one lakh FD and this was also done. To his surprise, instead of a FD, the relative received a insurance policy for that amount. Isn't this also a form of cheating?

    REPLY

    Sucheta Dalal

    In Reply to KAVIRAJ B PATIL 3 weeks ago

    It is a fraud. If there is any documentation and if your relative had checked the forms that he signed, he can file a complaint. At the very least he should ask for the original form on which he signed to check if there was any forgery or tampering.

    Subhash Chand Garg

    4 weeks ago

    This is the hallmark work style of the so called efficient MNC's

    Vaibhav Dhoka

    4 weeks ago

    No body learns from others reported complaints,and falls prey to such tactics.Therefore RBI,SEBI,IRDA withdraw permission to bankers.

    Rajnish Surve

    4 weeks ago

    Good the HSBC deserved this. The bank is involved in terrorist funding activities should be punish by the Indian government.

    CHANDRASHEKHAR VINAYAK KAKATKAR

    4 weeks ago

    Does this mean, that no communication by way of SMS/Emails/Courier/Post was received by Postwala family ?
    Was that also manipulated by the RM/Bank ?

    Suketu Shah

    4 weeks ago

    All wealth managers are the same.All shd be blacklisted.

    REPLY

    Rajesh Kothari

    In Reply to Suketu Shah 4 weeks ago

    My experience with most wealth or relationship managers is negative. Their sole interest is their target. Once you succumb to his game plan he stops serving or answering you.

    Vikas Gupta

    In Reply to Suketu Shah 4 weeks ago

    right.

    SATISH MADHAV

    4 weeks ago

    The malaise can be traced to the performance metrics and quotas fixed for bank employees.In the last 20 years with a multi national bank as an account holder,I have seen more than 30 Relationship Managers come and go as they cannot meet their quotas and are forced out.Only one lasted for more than a year.When they are under such high pressure to get business and commissions,some turn to outright fraud.
    Banking should be just that and banks must not be allowed to turn into brokerage houses selling mutual funds and insurance.

    REPLY

    Rajesh Kothari

    In Reply to SATISH MADHAV 4 weeks ago

    Agree strongly that banks should not be allowed to sale financial and insurance products. Since they have access to our bank account they know who has surplus to invest.

    SATISH MADHAV

    In Reply to Rajesh Kothari 4 weeks ago

    Exactly right.Once,I had received some outstanding payment and deposited it into the SB account of a domestic private bank.The RM alerted the director of private banking who tried his best to con me into investing it in a worthless ULIP scheme which had the highest upfront "investment fee".I stood firm and refused point blank which made him get very angry.
    This is how they operate.They try to sweettalk you into falling into an elaborately laid trap.

    Vikas Gupta

    In Reply to SATISH MADHAV 4 weeks ago

    right.

    Sandeep More

    4 weeks ago

    In my heydays, I learnt the hard way that when a Relationship Manager promises 25% pa returns, he is in fact telling us that he would be earning 25% at my expense. HDFC SAP from Standard Life Insurance Co was sold to me as a recurring deposit with free life insurance with minimum annual assured returns of 12% pa

    REPLY

    Ajay Kumar

    In Reply to Sandeep More 4 weeks ago

    Same case. Escalated this to the Managing Director Mr. Aditya. Contacted my lawyer who advised me against filing a Police complaint on mis-representation. Lated to my chagrin found out my lawyer was also representing HDFC in other cases!!

    Shirish Sadanand Shanbhag

    4 weeks ago

    Even when in the past HSBC is exposed, it has not improved its business ethics.

    REPLY

    Carlos De Souza

    In Reply to Shirish Sadanand Shanbhag 4 weeks ago

    Does a leopard change its spots ??

    Guru Kalle

    4 weeks ago

    This is a serious mistake by the bank.How did they allow that to happen ??

    REPLY

    Carlos De Souza

    In Reply to Guru Kalle 4 weeks ago

    This is NOT a mistake. They are CHEATS and have been so for decades, if not longer.

    Rajesh Kothari

    4 weeks ago

    Banker should NOT be your financial consultant. It’s a big mistake.

    Also second mistake is giving the PoA to do investment on your behalf. Never do it.

    Actually SEBI and RBI should ban banks from acting as investment advisors.

    MT

    4 weeks ago

    Happens when you listen to your banker , he is there to increase his bank balance , not yours

    Mohamed Meghani

    4 weeks ago

    This is due to the lax and irresponsible attitude of RBI the so called Watchdog of banks. Can you ever imagine such an attitude of Watchdog in any other nation

    REPLY

    GLN Prasad

    In Reply to Mohamed Meghani 4 weeks ago

    Let us be fair, and do not blame RBI for the frauds by Individuals in the Bank. The most shocking lesson is that even superior officials are hand in glove and always try to suppress facts and do not initiate any action to protect their employees. I am afraid that there should have been more such incidents that were not published as this case is not isolated. Exploiting senior citizen's faith in a bank is highly deplorable.

    PMC Bank Fraud: Management Seeks Undertaking from Staff that They Will Not Withdraw Deposits for 3 Years
    On the very day that the Reserve Bank of India (RBI) has to file an affidavit in response to a notice by the Bombay High Court, the management of fraud-hit Punjab and Maharashtra Cooperative Bank (PMC Bank) has sent emails to staff depositors seeking a declaration that they will not withdraw their personal deposits with the bank for a period of three years, even if restrictions on withdrawal are lifted by the regulator. 
     
    The email sent from the Bank's head office says, "...I/We undertake not to withdraw and to keep deposits with PMC Bank for 3 years even after the restrictions on the Bank are removed by Reserve Bank of India (RBI)." (See the image below)
     
     
    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, in 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.
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    COMMENTS

    gcmbinty

    4 weeks ago

    This demand of the PMC Bank is unjustified without any guarantee to the depositors that after three years the money would be returned as FD with market interest. The staff depositors or any other account holders must not sign on the dotted lines of the proposed
    declaration seeking a declaration that they will not withdraw their personal deposits with the bank for a period of three years. If the RBI is willing to stand a guarantee to the security of the deposits?

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