Mumbai Police on Monday filed a case against the former bank management and promoters of HDIL in the Punjab & Maharashtra Co-operative Bank case and said a special investigation team will be probing the case.
Based on a complaint by an RBI-appointed administrator, the economic offences wing filed the FIR for forgery, cheating and criminal conspiracy against the officials that has led the bank to losses of Rs 4,355.46 crore since 2008.
The RBI recently came down hard on the Punjab & Maharashtra Co-operative Bank (PMC) for under-reporting bad loans. Depositors, the RBI said, can withdraw just Rs 1,000 in the next six months, leaving them in the lurch ahead of the festival season. The central bank later increased the cash withdrawal limit to Rs 10,000 per account.
PMC, an urban co-operative bank in Sion, Mumbai, has a presence in seven states, encompassing Maharashtra, Delhi, Karnataka, Goa, Gujarat, Andhra Pradesh and Madhya Pradesh. It has a network of more than 137 branches.
The RBI move came as a huge shock to depositors who thronged the bank’s branches to find out the reasons behind the sudden move.
While co-operative banks in Maharashtra are not new to the banking regulator imposing such sanctions, the latest step came as a surprise as last available numbers showed that the bank was profitable. During 2018-19, PMC reported a net profit of almost Rs 100 crore compared with Rs 100.90 crore in the previous year. The bank had total deposits of Rs 11,617.34 crore against Rs 99,38.85 crore in 2017-18.
The central bank clamped down on PMC as it found the bank had under-reported non-performing assets (NPAs) during its annual inspection.
A statement from the RBI said that it was taking this action under Sub-section (1) of Section 35A of the Banking Regulation Act, 1949, read with Section 56 of the Act.
Section 35A deals with the power of the RBI to give directions and the banking company will be bound to comply with such orders.
The central bank can issue such directions in public interest to protect depositers’ money if a bank is “operating in a manner prejudicial to the interests of the banking company or to secure the proper management of any banking company’’. Section 56 applies to cooperative societies.
The RBI said that without its approval, PMC cannot grant or renew any loans and advances.
It cannot make any investment and incur any liability, such as borrowing funds or accepting fresh deposits.
