FIR against PMC Bank officials for ₹4,355 cr fraud, SIT to conduct probe

Officials of PMC Bank allegedly allowed unlawful loans between 2008 and August 2019 and even when there were defaults on repayments for years, would not classify these loans as non-performing assets (NPAs).

Mumbai Police’s Economic Offences Wing (EOW) on Monday registered a first information report (FIR) in the case of financial irregularities of over ₹4,355 crore at Punjab and Maharashtra Co-operative (PMC) Bank on a complaint by the Reserve Bank of India (RBI).

A man walks out from a PMC (Punjab and Maharashtra Co-operative) Bank branch in Mumbai, September 26, 2019. (REUTERS)

The FIR in this case was first filed with the Bhandup Police on the instruction of RBI-appointed administrator and branch manager at PMC Bank’s Bhandup (West) branch, Jasbir Singh Mattha. Later, the case was transferred to the EOW.

“The accused bank officers, in connivance with [executives from] Housing Development and Infrastructure Limited (HDIL), intentionally concealed information from the RBI on non-performing assets (NPAs). The accused also created false small loan accounts with bogus documents and submitted the same with the RBI to cover up their irregularities,” said an EOW officer.

Bank officials allegedly allowed unlawful loans between 2008 and August 2019 and even when there were defaults on repayments for years, would not classify these loans as non-performing assets (NPAs).

Named as accused in the FIR filed by the EOW on Monday are PMC Bank’s suspended director Joy Thomas, chairperson Waryam Singh; Rakesh Wadhwan and Sarang Wadhwan of HDIL; other entities connected to HDIL; as well as promoters and officer bearers of PMC Bank. Joint commissioner of police (EOW) Rajvardhan Sinha confirmed this development to HT and said investigation into the allegations of fraud has begun.

Thomas, the prime accused, had earlier said in a confession to the RBI that the bank had given loans to HDIL and its related entity in thousands crores without informing all the former board members.

Earlier reports stated that as of September 19, PMC Bank’s exposure to HDIL and its entities is nearly 73% of the bank’s total loan book size of ₹8,880 crore.

All the accused have been booked under sections 420 (cheating), 406 (criminal breach of trust), 409 (criminal breach of trust by public servant, or by banker, merchant or agent), 465 (forgery), 468 (forgery for purpose of cheating) and 120B (criminal conspiracy) of Indian Penal Code.

Sarang Wadhwan of HDIL did not comment on the matter.

On September 24, the RBI put restrictions on PMC Bank and barred the bank from making fresh loans or taking deposits. The EOW formed a special investigation team (SIT) on Monday to investigate the case, which is the biggest banking fraud of the year so far, according to the police.