Punjab and Maharashtra Co-operative (PMC) Bank was established on 13 February 1984 as a single branch co-operative bank. PMC has a total of 1814 employees and this bank is counted among the top 10 cooperative banks in the country. At its inception, PMC was a cooperative bank but in 2000 it was given the status of Schedule Commercial Bank by the Reserve Bank of India. PMC have the deposits of over Rs 11,600 crore but despite this, the depositors of PMC are not able to withdraw funds from their bank as there are various restrictions because of yet another another banking scams faced by Indian banking sector.
What is the scam?
About 70% of the total loan given by PMC Bank was lent to a company Housing Development and Infrastructure (HDIL) and its subsidiaries. HDIL and its subsidiaries opened 44 loan accounts to hide the loan amount in which this loan amount was transferred. This case came to light when HDIL could not repay the loan on time and the bank’s NPA reached 70%.
The news of not receiving money from the bank spread to the customers like fire and the customers of PMC bank reached the PMC bank to withdraw their hard earned money, but they were refused to give their deposited money and the withdrawal limit was set by the bank.
Economic offence wing of Mumbai Police had filed an FIR in this bank scam worth Rs 4355.43 crore. Police has also issued a lookout circular against 17 people and has arrested HDIL chief Rakesh Wadhavan and his son Sarang Wadhawan. Also, the Enforcement Directorate (ED) has sealed the assets worth Rs 3,500 crore of the HDIL group. Apart from this, RBI has also prohibited the bank from giving new loans during this period.