Relief for PMC depositors: HDIL asset valuation is on

Depositors of the Punjab and Maharashtra Co-operative (PMC) Bank can expect relief in the coming weeks, as the Reserve Bank of India-appointed experts have started

Depositors of the Punjab and Maharashtra Co-operative (PMC) Bank can expect relief in the coming weeks, as the Reserve Bank of India-appointed experts have started valuation of properties owned by Housing Development Infrastructure Limited (HDIL), which were mortgaged with the bank, for auctioning.

HT Image

Once the properties are auctioned, the money will be infused into the bank to repay the depositors.

The economic offences wing (EOW) of the Mumbai Police has attached HDIL’s properties worth at least ₹4,000 crore. A senior Mumbai police officer, who is in the know of the developments, said the PMC Bank’s RBI administrator-appointed valuer started the process on Wednesday. After the valuation, the base price of the properties will be decided and advertisements for the auction will be published in newspapers.

Sources said the EOW has requested the RBI administrator to initiate the auction of valued properties in a phased manner at the earliest, instead of auctioning them together.

The RBI last month put restrictions on the bank, blocking the savings of thousands of depositors, for extending questionable loans to HDIL. The fraud came to light after the RBI found out the HDIL had allegedly created more than 21,000 fictitious accounts to hide loans valued at over ₹4,300-crore loan extended to the bankrupt HDIL.

The RBI administrator on Wednesday wrote to the EOW, seeking a no-objection certificate for the auction. “We will move an application in the court in a day or two to de-attach the properties mortgaged with the bank. Once the court grants the permission, the bank can auction the properties under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act,” said a senior police officer.

The EOW had earlier moved an application in the court seeking auctioning of HDIL promoter Wadhwans’ movable and perishable properties under section 102 of Criminal Procedure Code (CrPC).

The properties include a yacht, two aircraft, 14 vehicles. They are not mortgaged with the bank. As Wadhwans had already given their consent to the bank to sell these properties, the EOW is looking to auction them soon.