PMC Bank Scam: RBI affidavit states it was cheated by the scam-hit PMC bank

The affidavit, filed by Rajlaxmi Sethi, Assistant General Manager, Department of Co-operative Bank Supervision, RBI, states that PMC Bank had submitted fraudulently manipulated data to the central bank for sample checks

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In its recently submitted affidavit, the Reserve Bank of India stated before the Bombay High Court on Tuesday that it was 'cheated' by the management of the now-defunct Punjab & Maharashtra Cooperative (PMC) Bank. The affidavit, filed by the Assistant General Manager, Department of Co-operative Bank Supervision, RBI, said that PMC Bank had repeatedly manipulated data to the central bank for sample checks, but "the sample of accounts picked for inspection did not contain undisclosed HDIL accounts."

The RBI inspection team had seen the HDIL accounts that were shown by PMC Bank but a majority of them were declared as non-performing assets.

The affidavit added that the PMC Bank had also sanctioned mortgage limits to a wholly-owned subsidiary of the HDIL. While doing so, the bank had initiated a conflict of interest as the bank's Chairman, the now arrested S. Waryam Singh, was also a director of the company. This was also a direct violation of the RBI's Master Circulars to the effect of July 2010 and July 2012.

Along with this, S. Waryam Singh had also chaired a PMC Bank board meeting to approve the mortgage overdraft in which he was interested, which again contravened the RBI norms.

The RBI inspection team established the links between Waryam Singh and HDIL promoters/directors (now arrested), which could have helped them get credit facilities, and later to pay off the one-time settlement of dues with other lenders, the affidavit said.

The RBI had sent a team for annual financial inspection of the now scam-hit bank on September 19, 2019, for the annual financial inspection of the PMC Bank and thorough scrutiny of the HDIL accounts, with a specific focus on the dealings and/or exposure of the bank with the HDIL group, besides other aspects.

The inspection was completed on November 2, 2019, and the report is currently being prepared, the affidavit said. It also added that the bank had falsified information of offsite returns submitted to the bank and had also provided false information to the RBi inspection team, resorting to the fictitious booking of profits.

The scam has already claimed eight lives and in most cases, it has been seen that the depositors did not have enough money to meet their medical expenses. The bank crisis had earlier claimed lives of Bharti Sadarangani, Sanjay Gulati, Nivedita Bijlani, Murlidhar Dharra, Fattomal Punjabi, Keshumalbhai Hinduja, Kuldeep Kaur Vig and Andrew Lobo.  

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