WHAT IS PMC BANK CRISIS

PMC Bank Crisis
Punjab and Maharashtra Cooperative Bank (PMC Bank) has been facing regulatory actions and investigation over alleged irregularities in certain loan accounts. Loans given to financially stressed real estate player Housing Development & Infrastructure (HDIL) are at the centre of the investigation.
The crisis at PMC Bank first came to light on September 24, 2019, the day the Reserve Bank of India (RBI) placed curbs on the activities of the Mumbai-based bank for six months. The central bank also limited the amount a customer could withdraw from their account during the next six months — to Rs 1,000 at first, and later to Rs 25,000.
The Enforcement Directorate has filed a money laundering case in the PMC Bank scam.
About PMC Bank
Founded in 1984, PMC Bank has 137 branches across seven states, 81 of these in Mumbai, Navi Mumbai, Thane and Palghar regions, 10 in Pune and 12 in the rest of Maharashtra. Its customers include small businesses, housing societies and institutions.
What happened at PMC Bank?
According to an FIR filed in the case, HDIL promoters allegedly colluded with the bank management to draw loans from the bank's Bhandup branch. The bank officials did not classify these loans as non-performing advances, despite non-payment.
Reports estimate the bank’s overall exposure to the HDIL group at around Rs 6,500 crore, or over 73 per cent of all of the bank’s advances — and all of this is not being serviced.
The bank also allegedly created fictitious accounts of companies which borrowed small sums of money, and created fake reports to hide from regulatory supervision.
In 2018-19, the bank had reported a net profit of Rs 99.69 crore in its annual report. The bank showed 3.76 per cent (or Rs 315 crore) of advances (Rs 8,383 crore) as gross non-performing assets (NPAs), which was good performance as compared to public-sector banks.
However, it is now clear that the bank presented false financial reports to hide the bad loan mess and the alleged collusion with HDIL and other companies.
Investigation so far
A special investigation team of the Mumbai Police is probing the case. The police's Economic Offences Wing registered a case against the former bank management and promoters of HDIL on September 30, 2019. The case for forgery, cheating and criminal conspiracy was filed on the basis of a complaint by RBI-appointed administrator.
The bank's former chairman Waryam Singh, managing director Joy Thomas and other senior officials, along with HDIL’s executive chairman Rakesh Kumar Wadhawan and his son Sarang, have been named in the FIR.
Most people named in the FIR have been arrested. The bank's former MD Joy Thomas and HDIL’s Wadhawans were arrested before him.
PMC BANK CRISIS NEWS
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RBI extends curbs on PMC Bank by 3 months as it works on revival plan
RBI has been talking to other authorities on sale of securities and loan recovery; Unlike in commercial banks, it has no powers ...| March 21, 2020, Saturday -
RBI extends regulatory restrictions on PMC Bank by 3 months till June
The RBI had put a six-month regulatory restriction on the bank on September 23, 2019| March 21, 2020, Saturday -
Double trouble: PMC Bank asked to deduct TDS on notional interest paid
CBDT asks lender to deduct tax at source on notional interest paid| February 18, 2020, Tuesday -
SC stays Bombay HC order to sell HDIL assets and repay PMC bank dues
A bench comprising Chief Justice S A Bobe and justices B R Gavai and Surya Kant took note of the appeal of the Reserve Bank of ...| February 07, 2020, Friday -
Shivalik Mercantile receives approval to become Small Finance Bank
The RBI had come with a scheme on voluntary transition of UCBs into Small Finance Bank (SFB) on September 27, 2018. But there was ...| January 06, 2020, Monday -
RBI inspection report of scam-hit PMC Bank yet to be finalised: RTI
The RBI declined to give copies of two complaints received by it regarding 'irregularities' in the bank and the action taken on ...| December 29, 2019, Sunday -
PMC Bank crisis: Administrator to seek valuation of HDIL's aircraft, yacht
These assets belong to HDIL group firms owned by Rakesh Wadhawan and his son Sarang, the prime accused in the Rs 6,500-crore scam ...| December 27, 2019, Friday -
PMC Bank money-laundering case: ED files chargesheet against HDIL promoters
The Enforcement Directorate on Monday filed a charge sheet against Housing Development Infrastructure Ltd (HDIL) promoters ...| December 16, 2019, Monday -
PMC Bank depositors detained for protesting outside CM Thackeray's house
The RBI had asked the bank not to grant or renew any loans and advances, make any investment or incur any liability, including ...| December 15, 2019, Sunday -
PMC Bank case: Depositors protest as HC refuses to interfere with RBI order
The protestors raised slogans against the court, the RBI and PMC Bank| November 19, 2019, Tuesday