The Punjab and Maharashtra Cooperative Bank customers were relieved on Friday after the Reserve Bank of India increased the withdrawal limit from Rs 1000 to Rs 10000.
The RBI on Tuesday, September 24, had barred the PMC Bank from carrying out almost all its routine banking activities for six months and allowed the depositors a one-time withdrawal of Rs 1000 from any of their accounts.
The news came as a shock to even the RBI employees who also had their deposits stuck at the PMC, reported moneycontrol.com.
According to reports, the PMC Bank’s Rs 2,500 crore loan to Housing Development and Infrastructure Limited (HDIL) forced RBI to impose restrictions. The bank failed to declare HDIL as NPA (Non Performing Asset) despite the firm’s default on repayments. Eventually, RBI took stock of the situation and termed the loan as “complete loss”.
The PMC bank’s suspended Managing Director Joy Thomas admitted in a press conference on Friday that the troubled bank shared a long term relationship with HDIL group and that the lender had been breaking the RBI rules for six to seven years.
Thomas further admitted said the bank advanced an additional Rs 96 crore to the promoters of HDIL last month despite the company being admitted for proceedings under the Insolvency and Bankruptcy Code.
HDIL itself accounts for 31% of the bank’s loan book of Rs 8,383 crore.
The underreporting of NPAs might change the bank’s financial numbers, as per RBI. While the bank says home, car and gold loans, business loans and loans to MSMEs forms most of its loans, there is every likelihood that the bank may have given some loans to real estate and other market players.
Meanwhile, BJP MP Kirit Somaiya and several PMC account holders filed police complaints against top officials of the bank and HDIL on Thursday. He alleged that the PMC bankers were hand in glove with the HDIL owners and hence bank continue to give loans.
“Out of ₹8,000 crore advances, more than ₹3,000 crore was given to HDIL and the group’s benami companies. Even after the HDIL defaulted, the bank gave it hundreds of crores of the loan without any proper documentation,” he alleged.