You are here: Home » Finance » News » Banks
Business Standard

PMC Bank scam: RBI expects forensic audit report by end of this month

The multi-state co-operative bank has been under the RBI restriction since September 23, after it had found financial irregularities

Press Trust of India  |  Mumbai 

Shaktikanta Das, RBI, Reserve Bank of India

The forensic audit report on the scam-hit Punjab & Maharashtra Co-operative Bank is expected by the end the month, Reserve Bank governor said on Thursday.

The multi-state co-operative bank has been under the RBI restriction since September 23, after it had found financial irregularities, including huge under-reporting of loans and non-performing assets to real estate developer HDIL to the tune of Rs 6,500 crore using hundreds of dummy accounts.

The central bank also sacked the board of the bank and appointed an administrator.

"There is a forensic audit which is underway. The final report of the forensic audit is expected by the end of this month," Das told reporters at the post-policy press conference.

In September, PTI had reported that the co-operative lender's actual exposure to HDIL was over Rs 6,500 crore -- which is 73 percent of its entire assets of Rs 8,880 crore.

Das said PMC, with the help of professional valuers, is also assessing the realisable value of assets mortgaged by borrowers as well the assets of the bank which have been seized by the Mumbai Police's EoW and Enforcement Directorate.

"Once we get the forensic audit and once we get the final numbers after doing a proper assessment of the realisable of the assets, a call will be taken on the further course of action," the governor said.

RBI has also put in place a co-ordination mechanism between the PMC administrator, the EOW, ED and the RBI is also monitoring the situation on a regular basis and take steps for asset monetisation, after obtaining court permission.

Recently, the RBI had informed the Bombay High Court that PMC had used special codes to hide the hundreds of dummy loan accounts of HDIL and of the 1,800 PMC employees, only about 25 could access these loans accounts.

The regulator had said these few employees used an access code to hide and restrict the visibility of these dummy accounts of the realty developer.

Das further said the RBI has given its suggestions to government for amendments in the co-operative bank act and the government is deliberating on it.

On this, Das on Thursday said, "they government will take a call and go to the Parliament to amend such provisions of the Act as they deemed fit based on our suggestions."

There has been demand from some quarters that urban cooperative bank, which have dual regulation now by the states and RBI, exclusively under the jurisdiction of the RBI.

Urban cooperative are registered as cooperative societies either under the respective State Cooperative Societies Act or under the Multi-State Cooperative Societies Act of 2002. They are regulated and supervised by Registrar of Cooperative Societies of the state they are registered with or by the Central Registrar of Cooperative Societies.

The RBI regulates and supervises the banking functions of UCBs and carry out on-site inspections and off-site surveillance on them. It also issues directions and operational instructions to UCBs to streamline functioning and to protect the interest of depositors.

First Published: Thu, December 05 2019. 18:20 IST