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Nov 25, 2019 | Blogs | Banking

RBI files an affidavit stating PMC cheated it

RBI files an affidavit stating PMC cheated it.

RBI has filed a detailed affidavit in Bombay High Court stating and admitting that the scam-hit PMC (Punjab & Maharashtra Cooperative Bank) cheated it. The affidavit has been filed by the Asst. GM, Dept of Cooperative Bank Supervision, RBI, Rajlaxmi Sethi. She specified that the PMC Bank had manipulated the data fraudulently and sent it to the RBI for sample checks. RBI cleared that the sample of accounts picked for inspection didn’t have the undisclosed HDIL accounts.


However, a majority of HDIL accounts shown by the PMC Bank and checked by the RBI inspection team, declared as non-performing assets. In addition to it, the PMC Bank also endorsed mortgage limits to a wholly owned entity of HDIL. The Director of that company was S. Waryam Singh, the arrested Chairman of PMC Bank. It shows the clear conflict of the violation of RBI’s rules and guidelines.


The inspection team of the RBI found out the links between Waryam Singh and HDIL directors who are now arrested, that helped them with the credit facilities etc. The RBI caught a MIS software called Opine that was owned by the PMC. This software has a script which was used for creating lists of accounts paid freshly but the script lacked the undisclosed loan accounts such as HDIL.


Apart from the undisclosed loan accounts that were authorized and renewed by the then MD K. Joy Thomas who is now arrested; these loan accounts were not logged in any of the Committees like Loan Committee, Recovery Committee or the Board of Directors. Although during the inspection, they instituted an important source of information.


As per the affidavit, PMC Bank fabricated the information of the offsite returns submitted to the central bank along with wrong/fake indent info given to the RBI inspection team.


In lieu of all this, and ensuing to an inside informer, the RBI at superfast speed, arrested the slide to protect the depositors. It adjourned its Board of Directors and appointed an Administrator for the evaluation of the securities offered by the HDIL, do the auctioning and recover the dues to meet the huge loss.
 

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