The RBI details in an affidavit that the PMC bank fraudulently submitted facts to the central bank for a sample check, but that “the accounts selected for inspection did not have unknown HDIL accounts.”

While the HDIL accounts shown by PMC Bank were overseen by the RBI inspection team, most of them were declared non-performing assets.

It also states that PMC Bank had also approved the mortgage limit for a wholly owned subsidiary of HDIL, when the bank’s chairman S.W. Variyam Singh was also a director of the company. This is a clear conflict of interest and violation of the RBI master circulars of July 2010 and July 2012 in effect.

S.W. Variyam Singh also chaired a meeting of the PMC bank board, where he approved the mortgage overdraft, again in violation of RBI norms.

The affidavit states that RBI’s inspection team has established links between Wariam Singh and HDIL promoters / directors (now arrested), which may help them get loan facility, and later with other lenders in arrears. Helped to pay a lump sum settlement.

Based on the available records, the scale of the breach and the associated debt, which was available, was very low due to ‘camouflage’ backed by PMC Bank, and what was noted was ‘flagged’, although it was not found Gaya much affects the financial health of the bank.

The inspection was completed on November 2, 2019 and the report is being ready, the affidavit said.

As per the preliminary findings, due to various financial irregularities, the PMC Bank’s networth had turned negative, with a significant erosion in deposits.

Detailing the “modus operandi of hiding the information related to HDIL exposure” employed by the PMC Bank, the RBI affidavit said they tampered with Management Information Systems and NPC Identification Process.

In this, the bank had given special access codes to the HDIL accounts with restricted visibility to less than 25 out of PMC Bank’s 1,800 staffers.

While running the script for system identification of the NPAs, it deliberately excluded the HDIL accounts which were thus omitted from the system generated reports of NPA accounts, and ditto with the Overdrawn Accounts list.

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Sanjay Gulati, 51, went for the protest march on Monday morning. He had been stressed about his deposits at PMC, said Manali Narkar, who was among the protesters.The Oshiwara resident went to the protest with his 80-year-old father. Hours later, he collapsed at the dinner table.

Mr Gulati, who was an engineer with the Jet Airways, had lost his job when the airline shut operations. He has a wife and two children, including a specially-abled son.Depositors, friends and family members of Sanjay Gulati gathered outside his home this afternoon. 

“When will get the government and the RBI wake up?” said a woman whose three family members have accounts in PMC Bank.Depositors have planned a candle light march this evening.The crisis at the cooperative bank was set off after real estate firm HDIL defaulted on loans from PMC Bank worth Rs. 4,355 crore.

The PMC Bank has been placed under “directions” by the Reserve Bank of India (RBI) since last month. This means that depositors’ withdrawals have been capped. The central bank on Monday raised withdrawal limit for account holders of PMC Bank to Rs. 40,000 from earlier withdrawal limit of Rs. 25,000.

Worried depositors of the bank, which has deposits of over Rs. 11,000 crore, have been protesting across Mumbai. Last week, they protested at the site of Finance Minister Nirmala Sitharaman’s press conference. Later, they met Ms Sitharaman, who later urged the RBI Governor to look into the concerns of the customers.

Four people, including promoters of HDIL to which PMC Bank made the sour loans, and the bank’s former chairman and ex-managing director have so far been arrested in connection with the latest banking fraud case to spook the country’s depositors and investors.

Rakesh Wadhwan, the chairman and managing director of HDIL, and his son Sarang Wadhawan were named in a police complaint that also accused the bank’s management of concealing non-performing assets and disbursing loans to HDIL leading to a loss of at least Rs. 4,300 crore.

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The regulator also said the relaxation in withdrawals will take care of over 70 per cent of the customers of the cooperative bank focused on low-income customers.

The RBI had on September 24 imposed a slew of restrictions on PMC Bank after finding many irregularities in its books, including massive under-reporting of NPAs. The lender is not allowed to offer new loans or accept deposits. It has been decided to allow the depositors to withdraw a sum not exceeding Rs 10,000 (including Rs 1,000 already withdrawn) of the total balance held in every savings bank account or current account or any other deposit account, the RBI said. Meanwhile two directors of HDIL that set off the crisis at PMC Bank by defaulting were arrested on Thursday. Rakesh Wadhawan and Sarang Wadhawan, senior executives at Housing Development and Infrastructure Ltd (HDIL), were arrested by the Economic Offences Wing .                                                                                                                                                             

The police complaint that the PMC officials misled the Reserve Bank of India for over a decade from 2008 to August 2019. The fictitious loan accounts were not entered into the bank’s core banking system. The complaint also named the bank’s then chairman Waryam Singh and its managing director Joy Thomas, along with other bank officials for criminal breach of trust, forgery and falsification of records of the bank

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