It has been a few days since the crisis at the Punjab and Maharashtra Cooperative (PMC) Bank has been brought to light and depositors are mulling different options to be able to get access to their hard-earned money. People are still to wrap their heads around the fact that such a big fraud could have been executed right under their noses.
On October 10, they even protested outside the Bharatiya Janata Party's office in Nariman Point, Mumbai. They even demanded the government to return their money and urged that the main accused in this case Wadhawan should not be granted bail.
Sitharaman met the aggrieved depositors and later addressing a press briefing in Mumbai on the same day said that even though the Finance Ministry is not involved in this case in anyways but she has asked the ministry to work with Rural Development Ministry & Urban Development Ministry to study in detail as to what is happening.
To get themselves out of this situation some of the big depositors of PMC Bank today met at the Dadar Gurdwara. The meeting was called by the Sri Guru Singh Sabha, which controls 17 gurdwaras in Mumbai and has a holding of over Rs 10 core in each account. In this meeting, it was suggested that about 200 big depositors, who have Rs 5 crore or more in their PMC account will not withdraw any amount for the coming three years if Reserve Bank of India (RBI) allows the bank to resume operations. This proposal was made in the presence of 30 big depositors. The Dadar Sikh Sabha, which is coordinating with all big depositors, will submit a proposal to the RBI-appointed administrator in the coming week.
The Sabha has said that its aim is to protect small depositors and prevent the bank’s merger with a large lender which would entail account holders having to forsake a large chunk of their deposits.
The crisis in PMC bank was first exposed on September 23, when RBI directed it to shut down its operations. In addition, a withdrawal limit of ₹1000 per customer which has been imposed. This has now (on October 3) been relaxed to Rs 25,000 and as per RBI now with this new limit, 70 per cent of the bank holders will be able to withdraw their entire savings.
According to reports, the major cause of this crisis is the exposure that the bank had to bankrupt Housing Development and Infrastructure Limited (HDIL).
According to the police, PMC Bank had replaced 44 loan accounts of the HDIL group with over 21,000 fictitious loan accounts, and through this managed to "camouflaged" defaults by the group.
This disclosure was made by The Economic Offences Wings of the city police while seeking custody of chairman and managing director of Housing Development and Infrastructure Ltd (HDIL) Rakesh Wadhawan and his son Sarang, arrested on October 3. It is being said that Joy Thomas, who was the Managing Director of the bank had full knowledge of what was happening in the bank.
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