The Reserve Bank of India told the Bombay High Court on Tuesday that an annual inspection of the scam-hit Punjab and Maharashtra Cooperative Bank had revealed that some bank officials manipulated with its core banking system to hide fraudulent loan accounts of real estate developer Housing Development and Infrastructure Limited, the Hindustan Times reported.

The affidavit submitted to the High Court said that PMC Bank had submitted manipulated data to the RBI for sample checks, but “the sample of accounts picked for inspection did not contain undisclosed HDIL accounts”, IANS reported. The Bombay High Court had earlier this month directed the RBI to file an affidavit disclosing what steps it had taken to protect the interests of depositors of the bank.

PMC Bank used special codes to hide hundreds of dummy loan accounts of HDIL, the RBI told the High Court according to Moneycontrol. Out of the 1,800 employees working at PMC Bank, only about 25 of them could access the loan accounts of HDIL and its group entities, the central bank said. These employees used an access code to hide and restrict the visibility of these dummy accounts.

RBI Governor Shaktikanta Das had said earlier that the central bank was monitoring the situation and a forensic audit was under way, amid uncertainty and fear among the PMC Bank’s depositors.

The RBI told the court on Tuesday that undisclosed loan accounts to the HDIL group were sanctioned and renewed with the approval of its suspended Managing Director Joy Thomas, who is now in jail. “These loan sanctions are not recorded in the minutes of loans committee, recovery committee and so on,” the affidavit said.

PMC Bank has an exposure of over Rs 6,500 crore to the bankrupt HDIL, which is 73% of its entire assets of Rs 8,880 crore.

The Mumbai Police’s Economic Offences Wing on Saturday arrested one of the former directors of PMC Bank, Rajneet Singh. Singh is the son of former Bharatiya Janata Party MLA Sardar Tara Singh.

The Enforcement Directorate is looking into allegations that the bank did not report all non-performing assets, or bad loans, after providing funds to a number of companies. The scam is said to be worth Rs 4,355 crore. The loan defaults are said to have caused a liquidity crisis at the bank.

In September, the RBI imposed curbs on the bank, saying that depositors would not be allowed to withdraw more than Rs 1,000 from the bank for six months. The withdrawal limit was raised to Rs 25,000, and then to Rs 40,000 in October. On November 5, the RBI again increased the withdrawal limit to Rs 50,000.