What is PMC Bank Crisis

PMC Bank Crisis

What is PMC Bank Crisis
What is 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.

Latest Updates on PMC Bank Crisis

RBI extends curbs on PMC Bank by 3 months as it works on revival plan

2 min read Last Updated :Mar 21 2020 | 6:47 PM IST
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RBI extends regulatory restrictions on PMC Bank by 3 months till June

2 min read Last Updated :Mar 21 2020 | 6:18 PM IST
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Double trouble: PMC Bank asked to deduct TDS on notional interest paid

3 min read Last Updated :Feb 18 2020 | 1:32 AM IST
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SC stays Bombay HC order to sell HDIL assets and repay PMC bank dues

2 min read Last Updated :Feb 07 2020 | 10:33 PM IST
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Shivalik Mercantile receives approval to become Small Finance Bank

2 min read Last Updated :Jan 06 2020 | 10:50 PM IST
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RBI inspection report of scam-hit PMC Bank yet to be finalised: RTI

3 min read Last Updated :Dec 29 2019 | 2:48 PM IST
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PMC Bank crisis: Administrator to seek valuation of HDIL's aircraft, yacht

3 min read Last Updated :Dec 27 2019 | 5:48 PM IST
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PMC Bank money-laundering case: ED files chargesheet against HDIL promoters

2 min read Last Updated :Dec 16 2019 | 5:37 PM IST
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PMC Bank depositors detained for protesting outside CM Thackeray's house

1 min read Last Updated :Dec 16 2019 | 12:55 AM IST
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PMC Bank case: Depositors protest as HC refuses to interfere with RBI order

2 min read Last Updated :Nov 19 2019 | 6:43 PM IST
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Bombay HC asks RBI what it has done to protect PMC bank depositors

3 min read Last Updated :Nov 04 2019 | 2:49 PM IST
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A health check on India's shadow banks shows the crisis is far from over

3 min read Last Updated :Oct 27 2019 | 4:22 PM IST
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Risk-based premium for deposit insurance: Time right, but tough to follow

7 min read Last Updated :Oct 27 2019 | 4:22 PM IST
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PMC Bank depositors in dire straits; govt does not care: Sitaram Yechury

1 min read Last Updated :Oct 22 2019 | 10:57 AM IST
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PMC Bank depositors hold protest outside RBI headquarters in Mumbai

1 min read Last Updated :Oct 22 2019 | 10:58 AM IST
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HDIL's Wadhawans sent to ED custody till October 22 in PMC Bank scam case

1 min read Last Updated :Oct 22 2019 | 10:58 AM IST
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Fourth incident of PMC depositor death, 'had no funds for surgery'

2 min read Last Updated :Oct 22 2019 | 10:58 AM IST
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SC refuses to take up PMC depositors' plea to lift withdrawal restrictions

1 min read Last Updated :Jan 08 2020 | 10:43 PM IST
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PMC Bank scam: Ex-director sent in police custody till October 22

2 min read Last Updated :Oct 22 2019 | 10:58 AM IST
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Will safeguard depositors' interests, PMC Bank management assures RBI

1 min read Last Updated :Oct 22 2019 | 10:58 AM IST
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