HDIL plunges as regulators examine link to PMC Bank

Bloomberg Mumbai | Updated on September 30, 2019 Published on September 30, 2019

File photo   -  The Hindu

Debt-ridden Housing Development & Infrastructure Ltd (HDIL) plunged to a record as regulators examined the scale of the real estate developers borrowings from a lender that was sanctioned by the Reserve Bank of India (RBI).

HDILs shares, which have plummeted 85 per cent this year, dropped 4.8 per cent at 10:53 a.m. in Mumbai. The RBI, last week, had curbed deposit withdrawals from Punjab & Maharashtra Co-operative Bank Ltd (PMC) for six months. They cited major financial irregularities, failure of internal controls, and wrong and under-reporting of exposures.

About a third of the banks loans were given to HDIL, K Joy Thomas, former managing director of Punjab & Maharashtra Cooperative, said. Banks are mandated to limit loans to a single borrower at less than one-fifth of their total exposure. The RBI has since removed the management of the lender.

The loans from the cooperative bank helped HDIL delay insolvency proceedings, Thomas said. Punjab & Maharashtra Cooperative has 137 branches in six Indian states.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on September 30, 2019
This article is closed for comments.
Please Email the Editor