PMC Bank fraud a humanitarian crisis now
For a majority of the 1.7 million depositors, the ₹4,335-crore loan fraud has resulted in a daily struggle to pay for medical treatment and billsUpdated: Oct 23, 2019 00:14 IST
No one in the Kotai family in Mulund in Mumbai’s north west voted in the Assembly elections held on Monday — not because of apathy but in protest. The joint family has 18 voting-age people and each of them has an account with the local branch of the Punjab and Maharashtra Co-operative (PMC) Bank, including 90-year-old Ghanshyam Das, the oldest of them. “Assets, earnings, pension – everything is stuck,” said Kamal Kotai, his son. “Mulund had been set up as a rehabilitation colony for refugees from Pakistan. The first generation of Partition refugees like my father came here broke and he says that the third generation has been made broke by this scam,” said Kotai.
On October 14, the Reserve Bank of India increased their withdrawal limit to ₹40,000 but it hasn’t solved the problems of the account holders. For a vast majority of the 1.7 million depositors, life continues to get harder by the day. It all started on September 23, when RBI curtailed the bank’s operations, capping withdrawals to ₹1,000 once in six months. Shortly after, the bank’s managing director, Joy Thomas, was arrested followed by two promoters of Housing Development Infrastructure Limited, Rakesh Wadhawan and Sarang Wadhawan, for their roles in the ₹4,335-crore loan fraud involving dummy firms and spurious audits. The firms and the audits were key to the modus operandi used by the perpetrators of the fraud to loan money to a cash-strapped HDIL. Agencies investigating the fraud have seized some of the Wadhawan’s assets including two business jets, many luxury sedans, and a luxurious farmhouse.
In Mulund, which has been worst hit by the bank crisis, many of the over 15,000 account holders in the area say they are struggling to meet daily expenses, let alone handle medical emergencies and wedding plans. Every morning, people queue up at their local branch to withdraw what they are allowed to and appeal for more. In the evenings, their sit before their television screens waiting for any news of further relief from RBI or assurance from the government. “We just can’t understand why the government has been so insensitive. Not a single politician has shown up here, not even the political leaders who represent the constituency,” said Kotai. For days, he joined the protests outside RBI’s headquarters. That’s stopped, though. “The police won’t allow us to gather there anymore.” He has also posted many appeals on Twitter to a wide range of people and institutions.
Kotai and his father are RSS members and feel particularly betrayed by the lack of concern from the neighbourhood unit. “The BJP government said it was fighting black money. But why is it freezing white money earned by tax-paying middle-class professionals?,” he asked.
Back in Mulund, Samuel Lewis kept track of the protest via WhatsApp. A life coach who has also a “huge amount of savings” stuck in the bank, Lewis has been encouraging the community of affected depositors to share their feelings instead of suffering privately. “Overnight, without our consent, without any consultation, you froze our accounts bringing 1.7 million people down to their knees. Their dignity is not negotiable.”
He said the crisis must be confronted on “humanitarian grounds”. On Monday, news broke of another person’s death in connection with the banking fraud. On Sunday afternoon, Bharati Sadarangini, 73, passed away after a cardiac stroke. Family members said the woman in Solapur was stressed for days because her daughter’s savings of ₹2.25 crore in the Mulund branch of the PMC Bank were stuck. She had no history of cardiac trouble. She was the fifth person to die while worrying about their financial future of themselves and their families in the light of the scam. Three of these deaths were reported from Mulund.
Also waiting in the line was AB Sumtiran, a senior corporate professional, who had come prepared to appeal to the bank for at least a lakh to be able to pay for his wife’s scheduled knee surgery.
“Regularly I checked its balance sheet for gross profit, net profit, NPAs (bad loans). I thought whenever I need my money, I will get it,” he said. “People are having sleepless nights here.” He said the bank staff has been kind and supportive throughout the crisis.