PMC Bank scam: SC stays HC order allowing shifting of Wadhwans from jail

The Supreme Court on Thursday partially stayed the Bombay High Court order allowing shifting of HDIL promoters Rakesh Wadhawan and Sarang Wadhawan, accused in the multi-crore Punjab & Maharashtra Cooperative (PMC) Bank scam case, from Mumbai's Arthur Road Jail to their residence.

A bench comprising Chief Justice S A Bobe and justices B R Gavai and Surya Kant took note of the submissions of Solicitor General Tushar Mehta that the high court order to the extent of allowing their release from prison needed to be stayed.

The law officer said the other aspect of the high court order such as sale of assets of the accused promoters under the supervision of high court appointed committee should be allowed to remain operative and the sole objection was with regard to their release from Arthur road jail.

The top court agreed with the submissions.

Earlier during the day the apex court had agreed to consider the plea of enforcement agencies against the high court order to release them from jail and keeping them in their residence under the constant watch of prison guards.

Mehta mentioned before the bench that the PMC bank scam involved Rs 7000 crore and the high court had on Wednesday passed a very "unusual order" while hearing a public interest litigation (PIL).

Mehta told the bench that the father-son are presently lodged under Arthur Road jail in judicial custody and if they are shifted to their residence as per the high court's order, it would be like bail to them.

The high court had on Wednesday set up a three-member committee for valuating and sale of encumbered assets of Housing Development and Infrastructure Limited (HDIL) to expeditiously recover dues payable by the firm to PMC Bank.

The high court had directed the superintendent of Arthur Road Jail to shift both the accused to their residence under the supervision of two jail guards to ensure their cooperation to the committee.

The high court had passed the order while hearing a PIL seeking direction for expeditious disposal of HDIL assets and properties attached by the Economic Offence Wing and the Enforcement Directorate and repaying PMC Bank depositors at the earliest.

The fraud at PMC Bank came to light in September last year after the Reserve Bank of India discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt HDIL.

According to RBI, the PMC bank masked 44 problematic loan accounts, including those of HDIL, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

Mumbai Police's Economic Offences Wing and the ED registered offences against senior bank officials and HDIL promoters.

PMC Bank depositors detained for protesting outside CM Thackeray's house

Some of the depositors of the Punjab and Maharashtra Co-operative (PMC) Bank were detained by Mumbai Police on Sunday after they protested outside Matoshree, the residence of Chief Minister Uddhav Thackeray.

The depositors also held protests outside Reserve Bank of India (RBI)'s office in Mumbai, where people especially women were heard sloganeering- "We Want Justice" and were holding placards with Hindi slogans "RBI promise us to return our money".

Later, a delegation of the PMC Bank depositors met Maharashtra Chief Minister Uddhav Thackeray and apprised him about their concerns.

Some of the women protesters also used a copper plate and a wooden stick to create sounds in order to mark their protest.

In September, the RBI had imposed regulatory restrictions on the PMC Bank for six months over alleged financial irregularities.

The RBI had asked the bank not to grant or renew any loans and advances, make any investment or incur any liability, including borrower of funds and acceptance of fresh deposits.

Subsequently, the RBI capped the withdrawal limit for the PMC Bank depositors to Rs 1,000 which was gradually increased to Rs 50,000.

Final report on PMC Bank is expected by Dec-end: RBI guv Shaktikanta Das

A forensic audit is underway at Punjab and Maharashtra Co-operative (PMC) Bank and the final report is expected by the end of December, said RBI Governor Shaktikanta Das.

Simultaneously, PMC Bank, with the help of professional valuers, is assessing the realisable value of assets that have been mortgaged by companies, which have availed of loans and other assets identified by the economic offences wing of the Mumbai Police and the Enforcement Directorate (ED).

We have also put in place a coordination mechanism among players involved — the bank administrator, ED, Economic Offences Wing, RBI — to monitor the situation regularly and take steps for monetisation of these assets. A call will be taken on further course of action once the RBI gets the report and a number (the realisable amount that can be obtained from the mortgaged securities).

78% PMC bank depositors can withdraw entire deposits: Sitharaman

Nearly 78 per cent depositors of the scam-hit PMC Bank have been allowed to withdraw their entire deposits even though the ceiling of Rs 50,000 on withdrawal continues, Union Finance Minister Nirmala Sitharaman said in Lok Sabha on Monday.

The Finance Minister said that in case of medical emergencies, marriages and other crisis situations, a depositor of the Maharashtra-based PMC Bank can withdraw upto Rs 100,000 by invoking the 'hardship provisions' of the RBI.

"Nearly 78 per cent depositors are now allowed to withdraw their entire account balance. They are small depositors. With this, the concerns of all small depositors are taken care of," she said during the Question Hour.

The minister added that steps are being taken to seize properties of promoters of the PMC Bank, auction such properties and repay depositors with the money obtained. Sitharaman said the Rs 50,000 withdrawal ceiling for depositors continues but for scenarios like marriage, education, livelihood and other "hardships", the withdrawal limit is Rs 100,000.

According to the Mumbai Police's Economic Offences Wing (EOW), the PMC Bank management, allegedly in cahoots with a business family concealed from the banking regulators' scrutiny huge loan defaults by HDIL group firms.

Over 70 per cent of the bank's advances went to HDIL group, which led to a huge crisis when the realty group defaulted on repayment, the EOW had said.

The RBI had on September 24 imposed operational curbs on PMC Bank and appointed an administrator following detection of alleged financial irregularities.

PMC Bank: Unable to pay medical bills, Thane man dies; 8th victim so far

Another depositor of the troubled cooperative lender PMC Bank has died allegedly due to an inability to take care of his medical bills, his family members said on Monday.

The 74-year-old Andrew Lobo died at his home at Kasheli in the neighbouring Thane late Thursday evening, his grandnephew Chris told PTI.

Lobo is the eighth PMC depositor to have reportedly died after the bank was placed under an RBI administrator with withdrawal caps. There was a case of suicide of a depositor as well at the bank since September 23 when the RBI suspended the bank management.

Chris said Lobo had over Rs 26 lakh in his accounts with the bank and used to depend on the interest for his day- to-day needs.

"Two months ago, he developed a lung infection which needed regular medicines and visits to the doctor. His money was stuck in the bank, and we also have our accounts with PMC, due to which none of us could take care of his medical requirements," Chris said.

Lobo had a business of fabrication in suburban Mulund till he discontinued it a few years ago, the grand nephew said, adding his accounts were with the Mulund branch.

The RBI has put an administrator on the bank and claims that 77 percent of the 16 lakh depositors can fully withdraw their money with the limits having being raised to Rs 40,000 per account.

The city police has pegged the overall size of the financial scam at the bank at Rs 4,355 crore and has arrested five people in connection of the case.

According to investigators, the bank management colluded with realty developer HDIL in such a way that loans were made to the company despite non-payments through specially created dummy accounts. These transactions were also allegedly hidden from the central bank's audit.

As a result, over 6,500 crore of the bank's overall advances of Rs 9,000 crore have turned sour.

Amazon's combined FY19 losses in India businesses at over Rs 7,000 cr

Several customers of the Punjab and Maharashtra Cooperative (PMC) Bank gathered outside the RBI’s office here on Tuesday, demanding an assurance that their money deposited with the scam-hit bank was safe.

They also demanded that the PMC Bank be revived so that they could withdraw their money.

The PMC Bank has been put under restrictions by the RBI after an alleged fraud of Rs 4,355 crore scam came to light following which the deposit withdrawal was initially capped at Rs 1000, causing panic and distress among depositors.

Subsequently, the withdrawal limit was raised to Rs 40,000 by the Reserve Bank of India (RBI).

Around 200 customers gathered outside the RBI’s office in the Bandra-Kurla Complex on Tuesday and said they want that their accounts with the PMC Bank be made operational.

Later, a five-member delegation of the depositors met the RBI officials and put forth their grievances and demands.

“The bank can be revived because the probing agency has attached more assets of the accused than the loans given. The bank has become a sinking ship now, but we want that it should be restarted immediately,” a depositor, Satish Thapar, told PTI.

He said the depositors’ current and savings accounts with the PMC Bank should be activated with immediate effect so that “they can have their bread and butter”.

“We want the RBI to come forward and issue a statement that our money is safe,” he said.

Thapar said when former prime minister (Manmohan Singh) can speak on the matter, why not the current PM (Narendra Modi).

“Around 16,000 account holders are suffering but the government is mum on the issue. Such a situation will leave us with no other option but to become a terrorist,” he said.

Another account holder Manoj Agarwal said, “Around six people died and we don’t know how many people more are in depression. We always heard Modiji’s ‘Man ki Baat’ but now who will listen to our voice?”

The crisis at the bank is being attributed to loans given to realty player Housing Development Infrastructure Ltd (HDIL), which were allegedly hidden from regulators’ scrutiny, turning non-performing assets.

Five persons, including HDIL promoters, have been arrested in the case.

Assure our money is safe, revive PMC Bank: Depositors urge RBI

Several customers of the Punjab and Maharashtra Cooperative (PMC) Bank gathered outside the RBI's office here on Tuesday, demanding an assurance that their money deposited with the scam-hit bank was safe.

They also demanded that the PMC Bank be revived so that they could withdraw their money.

The PMC Bank has been put under restrictions by the RBI after an alleged fraud of Rs 4,355 crore scam came to light following which the deposit withdrawal was initially capped at Rs 1000, causing panic and distress among depositors.

Subsequently, the withdrawal limit was raised to Rs 40,000 by the Reserve Bank of India (RBI).

Around 200 customers gathered outside the RBI's office in the Bandra-Kurla Complex on Tuesday and said they want that their accounts with the PMC Bank be made operational.

Later, a five-member delegation of the depositors met the RBI officials and put forth their grievances and demands.

"The bank can be revived because the probing agency has attached more assets of the accused than the loans given. The bank has become a sinking ship now, but we want that it should be restarted immediately," a depositor, Satish Thapar, told PTI.

He said the depositors' current and savings accounts with the PMC Bank should be activated with immediate effect so that "they can have their bread and butter".

"We want the RBI to come forward and issue a statement that our money is safe," he said.

Thapar said when former prime minister (Manmohan Singh) can speak on the matter, why not the current PM (Narendra Modi).

"Around 16,000 account holders are suffering but the government is mum on the issue. Such a situation will leave us with no other option but to become a terrorist," he said.

Another account holder Manoj Agarwal said, "Around six people died and we don't know how many people more are in depression. We always heard Modiji's 'Man ki Baat' but now who will listen to our voice?"

The crisis at the bank is being attributed to loans given to realty player Housing Development Infrastructure Ltd (HDIL), which were allegedly hidden from regulators' scrutiny, turning non-performing assets.

Five persons, including HDIL promoters, have been arrested in the case.

PMC Bank depositors hold protest outside RBI headquarters in Mumbai

Depositors of the scam-hit Punjab and Maharashtra Cooperative (PMC) Bank held a protest outside the Reserve Bank of India (RBI) headquarters in south Mumbai on Saturday.

The depositors gathered outside the RBI around 11.45 am and held protests by showing placards and chanting slogans against PMC Bank and the RBI, a police official said.

Police were deployed to avert any untoward incident, he said, adding that nobody has so far been detained or taken into custody.

After an alleged Rs 4,355 crore scam came to light at the PMC Bank, the RBI initially capped withdrawals at Rs 1,000 in view of liquidity crisis, and later hiked it to Rs 40,000 in three moves.

The depositors have been protesting to get their money back.

Will discuss PMC Bank issue with PM Modi: Fadnavis tells depositors

Maharashtra Chief Minister Devendra Fadnavis has told the depositors of the scam-hit PMC Bank that he would discuss the issue of their distress with Prime Minister Narendra Modi when he meets the latter on October 13.

A group of Punjab and Maharashtra Cooperative (PMC) Bank customers met Fadnavis on Friday after an election rally he addressed here to campaign for BJP candidate and sitting MLA Sanjay Kelkar, who is contesting from Thane City constituency.

Aggrieved depositors put forth their woes to the CM, who gave them a patient hearing, but said he could not give them any assurance as the model code of conduct was in force.

Fadnavis said he would be meeting Modi on October 13, and he had already prepared a brief on the PMC Bank issue for the meeting.

"After the elections on October 21,we will follow up on this issue and ensure that the bank is bailed out at any cost. It will not meet the same fate as the other co-operative banks," he said.

PMC Bank is facing a crisis after an alleged Rs 4,500 crore scam came to light last month. The RBI has capped withdrawals from the bank at Rs 1,000 and later increased it to Rs 25,000 following protests by depositors.

The bank had allegedly lent over 70 per cent of its Rs 9,000 crore in loans to near-bankrupt realty player HDIL.

Adequate security cover provided for loans taken from PMC Bank: HDIL

Housing Development and Infrastructure Limited (HDIL) said on Tuesday that adequate security cover had been provided by the company for the loans taken from PMC Bank.

In a statement to the exchanges, HDIL said, "The company has over a period of time availed of banking facilities from various banks and institutions including PMC Bank in the normal course of business. Adequate security cover in favour of the banks, including PMC Bank, has been created over the assets of the company for these facilities in due compliance with all banking regulations in line with RBI guidelines. All the books of the company are audited and reflect a true and fair picture as regards to the affairs of the company and the group," it said

HDIL said it was facing temporary cash flow issues due to the external environment in the real estate sector and it was because of the same that the company had been admitted under IBC 2016.

"With relation to borrowings from PMC, we have already issued letters requesting an appointment with the administrator in charge of the bank to put forth the true and correct picture and to discuss a strategy to safeguard the interest of all stakeholders, including PMC Bank and its depositors," it added.

It said it had been made aware of certain regulatory action against PMC Bank and its management. "It is also learnt that certain action is being initiated against HDIL and its promoters. We are unaware of any action against HDIL and its promoters," the company said.

Reserve Bank officers have Rs 105 crore fixed deposit in PMC Bank

Among the many depositors hit by the curbs placed on the beleaguered Punjab and Maharashtra Cooperative Bank (PMC) are some employees of the Reserve Bank of India (RBI).

The Reserve Bank Officers Cooperative Credit Society, which caters to the credit needs of RBI officers posted all over India, has a fixed deposit of Rs 105 crore in the bank on which the RBI has placed various curbs for six months following revelations of irregularities.

The RBI has said the depositors of the bank would not be allowed to withdraw more than Rs 1,000 from a savings account, current account, or any other deposit account. The bank can’t grant or renew loans or advances, nor can it invest without RBI's approval.

The directions will remain in force for six months from the close of business on September 23, the RBI said in a statement.

The annual report of Reserve Bank Officers Cooperative Credit Society for FY19 says that officers have a fixed deposit of Rs 105 crore in PMC Bank. The RBI Officer’s Cooperative Credit Society also has fixed deposits or short term deposits to the tune of Rs 478.64 crore in different cooperative banks. The society has a fixed deposit of Rs 100 crore with Bharat Co-operative Bank, Rs 85 crore with Thane Bharat Sahkari Bank, Rs 50 crore with Solapur Janata Sahkari Bank and Rs 85 crore with Apna Sahkari Bank. The also have fixed deposits in many other cooperative banks.

The RBI has superseded the board of the PMC Bank and appointed a retired chief general manager of the central bank, J B Bhoria, as an administrator for the troubled multi-state cooperative bank.

Bhoria has ascertained that the bank's liquidity profile is good enough and depositors should not panic. "Even the bank’s loans are secured against adequate assets," he said.

The bank has 19 per cent statutory liquidity ratio – deposits that are invested in government securities, and 3-4 per cent cash reserve ratio – share of deposits that are maintained in cash.

The multi-state-cooperative bank had gross non-performing assets (NPAs) of 3.76 per cent and net NPAs of 2.19 per cent at the end of March this year. It has 137 branches.

The RBI has also said the directions against the bank should not be construed as cancellation of the banking licence. “The bank will continue to undertake banking business with restrictions till further notice/instructions. The Reserve Bank may consider modifications of these directions depending upon circumstances,” it said.