PMC Bank Crisis: Joy Thomas sent to police custody till October 17

Joy Thomas is one of the accused in the Rs 4,355-crore PMC Bank scam

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The suspended managing director of Punjab and Maharashtra Co-operative (PMC) Bank, Joy Thomas has been sent to police custody till October 17 by the Mumbai court. Joy Thomas is one of the accused in the Rs 4,355-crore PMC Bank scam. He was arrested by the Mumbai Police on Friday (October 4). On the same day, ED raided six locations in Mumbai and adjoining areas in relation to PMC Bank case. Premises of the now-bankrupt Housing Development and Infrastructure Limited (HDIL) and director Rakesh Wadhwan's house were among the locations searched by the ED.

In addition to this, the officials have also registered a money-laundering case to probe alleged fraud in PMC bank. These raids are being conducted after central agency filed a complaint under the Prevention of Money Laundering Act

On Oct 3, HDIL promoters Rakesh Wadhawan and Sarang Wadhawan were arrested by Mumbai police. Their property which is being pegged at worth Rs 5000 crore has also been frozen.

It is noteworthy that, on September 20 a plea has been filed in Bombay High Court challenging the restrictions imposed by the Reserve Bank of India on the bank.

The public interest litigation (PIL) was filed by an NGO Consumer Action Network and eight persons, who claimed to be depositors and account holders in the PMC Bank.

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.

It is being said that the major cause of this crisis is the exposure that the bank had to bankrupt Housing Development and Infrastructure Limited (HDIL). The total exposure to the sick real estate company is being pegged over Rs 6,500 crore, which translates to 73 per cent of its total assets worth.

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