HDIL exposure to PMC Bank may be higher than estimated

Tribune News Service

Mumbai, October 16

The exposure of PMC Bank to the controversial HDIL group may be higher than Rs 6,200 crore, as estimated so far, sources in the Reserve Bank of India say. PMC Bank had a loan book of Rs 8,383.33 crore as on March 31, 2019, according to information available from the RBI, which has appointed an administrator to oversee its functioning.

Efforts are on to trace borrowers of the remaining funds lent out by the bank before its operations were suspended by the RBI last month. “We are still calculating PMC Bank’s exposure to HDIL,” said JB Bhoria, RBI official appointed administrator by the central bank.

Sources say auditors appointed by the central bank are scrutinising loans to several accounts amidst revelations that the Wadhawans of HDIL may have opened several bogus accounts to siphon of cash from PMC Bank. So far, around 21,000 fake accounts used to siphon funds from the bank have been detected.

RBI officials, whose own cooperative society has more than Rs 100 crore in deposits with the PMC Bank, are demanding higher scrutiny of cooperative banks in the country. “Though a lot of properties belonging to the Wadhawans, HDIL and office-bearers of the PMC Bank have been attached, it is not clear whether these will be enough to cover the loans made to them,” an RBI official pointed out.

The economic offences wing of the Mumbai police has estimated the value of the properties attached in the PMC case so far at Rs 3,800 crore. Most of these are in the form of land on Mumbai’s outskirts and interior parts of the country that were placed as collateral for obtaining loans from PMC Bank. However, it is not clear whether the value of the collateral was illegally inflated to obtain loans of higher value.

Moreover, say RBI officials, land parcels belonging to HDIL may not fetch attractive prices due to prevailing slump in the real-estate sector. Meanwhile, the Shiv Sena is mobilising members of the Sikh community who account for bulk of the bank’s depositors, to demand nationalisation of PMC Bank.

“PMC Bank should be merged with a bigger private or nationalised bank to protect interests of depositors,” says Shiv Sena MP Anil Desai. Along with his party colleagues and leaders of the Sikh community, Desai held a meeting with RBI Governor Shaktikanta Das where he made this demand.