Irregularities undertaken by the Punjab and Maharashtra Co-operative Bank have been on the RBI’s radar for a while now. Sources told The Quint that the RBI swung into action as soon as sufficient evidence of fraud and data manipulation was available. The regulator immediately acted by superseding the bank’s board of directors and appointed JB Bhoria as administrator.
In a press conference held by the former PMC Bank MD Joy Thomas on 27 September, Thomas claimed that PMC Bank officials approached the RBI on 19 September in a bid to ask for time to regularise their accounts. He then stated that a day later, on 20 September, RBI’s inspection officer visited the bank and restrictions were imposed by 23 September.
Sources, however, debunked Thomas’s claims that the decision was hasty. The central bank was allegedly aware of the irregularities practised by PMC Bank in sanctioning credit facilities to HDIL and its group companies. Sources also stated that PMC officials approached the RBI only when a whistleblower associated with the bank threatened to inform the regulator about the irregularities that were being practised by PMC Bank.
Punjab and Maharashtra Co-operative (PMC) Bank had allegedly falsified vital data that was submitted to the RBI with the deliberate intention to mislead and misrepresent facts. Sources said that as soon as it was established that the data given by PMC Bank was manipulated, the regulators took over and imposed restrictions.
While addressing the media, ex-PMC Bank MD Joy Thomas had accepted that HDIL was sanctioned loans to the tune of Rs 2,500 crores over the last 6 years and although the company had stopped repaying their loans for the last 3 years, the board members of the bank were unaware of this. This confession allegedly hastened the RBI’s action. The central Bank appointed administrator is now set to file an FIR against Thomas for fraud.
Not just Thomas, even the bank’s chairman, Waryam Singh has been on the RBI radar. An explanation has been sought from PMC Bank on the connection between Waryam Singh and the HDIL group of companies.
The RBI sought an explanation after large scale unexplained transactions were recorded between HDIL group accounts and bank chairman Waryam Singh. The central bank also found a large-scale evergreening of group accounts of HDIL. This constant renewal of loans helped mask the fact that the group accounts had defaulted on their loans.
These group accounts were categorised as ‘non-performing’ by the RBI. PMC Bank however, treated them as standard accounts.
While RBI investigation has already been underway for almost a week now, once an FIR is filed with the Economic Offences Wing, the Mumbai police too will unravel the details through their probe.
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