Before RBI clampdown, PMC Bank saw huge cash withdrawals from big depositors

Waryam Singh

Waryam Singh

"@RBI is their regulator and they are taking action".

The loans from the cooperative bank helped HDIL delay insolvency proceedings, Thomas said.

The slum redevelopment focused HDIL is in the bankruptcy court now after being hit by a severe cash crunch following the failure of some of its key projects in the city.

On Thursday, RBI extended relaxations to PMC account holders to withdraw Rs 10,000.

The action was necessitated as in case of PMC Bank, the small depositors constitute around two-thirds of its depositor base, the source explained.

The investigators have filed a case for cheating, criminal breach of trust, forgery, and criminal conspiracy under the Indian Penal Code against the bank's Chairperson Waryam Singh and its Managing Director Joy Thomas.

The source further said Thomas has also confessed that most of the board members were in the dark about these loans. He ceased to be a non-executive director of the company in March 2015. "The whistleblower board member approached the regulator and provided information about financial irregularities and the real estate company's loans not being classified as nonperforming loans from last twothree years, despite defaults on repayments", the source told PTI.

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"The letter goes on to say that when RBI officers began asking for details in 2017 ". stressed legacy accounts belonging to this group were replaced with dummy accounts". Banks are mandated to limit loans to a single borrower at less than one-fifth of their total exposure. For group companies, the exposure limit is 20%.

"The company has over a period of time availed of banking facilities from various banks and institutions including PMC Bank in the normal course of business", HDIL Vice Chairman and MD Sarang Wadhawan said in a regulatory filing.

The regulator sent the inspection team to the bank's headquarters in suburban Mumbai on the evening of September 19 itself. The restrictions imposed by RBI had led to massive protests by PMC Bank account holders.

On September 23 evening, the RBI had put a slew of restrictions on the bank for six months.

In a communique issued the previous day, RBI Chief General Manager Yogesh Dayal said as per the apex bank's directions, depositors can not withdraw more than Rs 1,000 from their savings/current/other deposit accounts, leading to huge chaos outside the PMC branches in Mumbai and other parts of India.

The RBI last week took charge of the bank and suspended the bank's board.

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