Money & Banking

HDIL promoters arrested in PMC Bank loan fiasco

Forum Gandhi Mumbai | Updated on October 03, 2019 Published on October 03, 2019

The Economic Offences Wing of the Mumbai Police, on Thursday, arrested Sarang Wadhawan and Rakesh Wadhawan, promoters of Housing Development Infrastructure Limited, in connection with the PMC Bank fiasco.

The authorities have also frozen fixed assets worth ₹3,500 crore of the Wadhawans, according to police officials involved in the case. This comes even as the Reserve Bank of India further raised the cap on withdrawal for PMC Bank customers to ₹25,000 from ₹10,000.

Sarang is the Managing Director and Rakesh is the Chairman of HDIL. The two have been charged under several sections of the Indian Penal Code (IPC) for alleged fraud.

DCP Pranay Ashok, spokesperson of Mumbai Police, said, “The Wadhwans were summoned to come for interrogation at the EOW office. At the time of interrogation, they were unable to give satisfactory and sufficient information, hence, they have been arrested. There will be further enquiry on the cheating case.”

The spokesperson added that “HDIL and 44 of its linked accounts have been identified and have been sealed.”

An official said that the probe indicated that a few employees of PMC Bank had tampered with the bank’s software. Hence, the 44 accounts mentioned in the FIR were not traceable in the system. “These employees masked the passwords of these 44 accounts and hence they were untraceable.”

According to the FIR, between 2008 and August 2019, HDIL Pvt Ltd had taken a loan from PMC Bank’s Bhandup branch, but the money was not returned. PMC Bank did not declare HDIL’s account as non-performing assets or inform the RBI.

The FIR also named Joy Thomas, former Managing Director of PMC Bank, Waryam Singh, Chairman of the bank. According to sources, the whereabouts of both Thomas and Singh are not known. Summons issued to Thomas and Singh went undelivered. A demat account of ₹100 crore in Singh’s name has been sealed.

70% of depositors covered

The RBI said that with a view to reducing the hardship of depositors, it had decided to enhance the limit for withdrawal to ₹25,000. With this, more than 70 per cent of PMC Bank depositors will be able to withdraw their entire account balance.

The central bank had earlier limited withdrawals to ₹1,000, and raised it to ₹10,000.

The RBI has also decided to appoint a Committee of three members to assist the PMC Bank Administrator.

 

Published on October 03, 2019
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