PMC Bank fraud: Retired high court judge to oversee recovery process

Acting on a Public Interest Litigation (PIL), the Bombay High Court on Wednesday appointed a committee headed by Justice (retired) S Radhakrishnan to oversee sale

Acting on a Public Interest Litigation (PIL), the Bombay High Court on Wednesday appointed a committee headed by Justice (retired) S Radhakrishnan to oversee sale of properties belonging to Housing Development and Infrastructure Limited (HDIL) to expeditiously recover the dues payable by the realty group to fraud-hit Punjab and Maharashtra Cooperative (PMC) Bank.

PMC Bank account holders on a protest in Mumbai, on January 5. (Pratik Chorge/HT Photo)

The PIL was filed by advocate Sarosh Damania seeking directions for expeditious disposal of HDIL group assets and properties attached by the Economic Offences Wing (EOW) of the Mumbai Police and repayment to the depositors of PMC Bank at earliest. Damania contended that normal court proceedings will take years to refund the dues of depositors and therefore directions were required for speedy disposal of the attached assets and properties.

The EOW had on September 30, 2019, registered an offence in connection with the purported fraud at the multi-state scheduled cooperative bank, accusing certain people at the helm of illegally extending huge loans to HDIL and its group companies.

According to the RBI, PMC Bank had masked the problematic 44 loan accounts involving advances to the tune of Rs 7,457.49 crore, including the HDIL loan accounts, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

The bank had created 21,049 fictitious accounts in order to ensure its master data tallies to the loan disbursals of Rs 7,457.49 crore, RBI has stated in an affidavit filed in response to other PMC Bank related petitions before the high court.