A money laundering case has been registered against the board members of the Punjab and Maharashtra Bank and promoters of real estate company Housing Development and Infrastructure Limited, or HDIL, NDTV reported. The Enforcement Directorate also conducted raids at six locations in connection with alleged financial irregularities at the bank.
The money laundering case was filed on the basis of the Economic Offences Wing’s first information report filed earlier this week. The Enforcement Directorate is looking into allegations that PMC Bank did not report all non-performing assets or bad loans after providing funds to a number of companies. The total amount of such loans was estimated to be between Rs 2,000 crore and Rs 2,500 crore.
This came a day after the Mumbai Police arrested top HDIL officials Rakesh Wadhawan and Sarang Wadhawan. The two, booked on cheating, forgery and criminal conspiracy charges, were interrogated on Thursday morning and subsequently arrested as they failed to cooperate with the inquiry. They will remain in police custody till October 9, PTI reported.
“During investigation, we found that there were nearly 44 accounts at the bank that were password-protected,” an unidentified official told The Indian Express. “These accounts were linked to the Wadhawans and DHIL-linked entities where a lot of the money from the bank had been transferred.”
PMC’s suspended managing director Joy Thomas also confessed that the bank had provided Rs 2,500 crore loans, which is nearly 30% of its total loan portfolio of Rs 8,383 crore, to HDIL for many years. Thomas claimed that the bank did not inform the Reserve Bank of India about HDIL’s inability to pay off the loans as it was worried about the bank’s growth.
Last week, the RBI imposed restrictions and said depositors would not be allowed to withdraw more than Rs 1,000 from the bank for six months. The central bank also said PMC Bank would not be allowed to grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds. It later increased the withdrawal limit for bank customers to Rs 25,000.
The Reserve Bank of India has over 20 cooperative banks under it, but PMC Bank is the largest among them with deposits of Rs 116.2 billion as of March 31.
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