The ongoing Rs 4,355-crore Punjab-Maharashtra Cooperative (PMC) bank fraud has left many people in lurch, as the Reserve Bank of India (RBI) placed directions on the bank, and account holders could not withdraw their money. The scam unfolded after the bank's former MD Joy Thomas and chairman Waryam Singh were taken into custody by the Economic Offences Wing (EOW), unearthing its nexus with the real estate development company HDIL. Here's how the case unfolded. Pic/Suresh KK
On September 23, the RBI putting restrictions on the bank, enabling account holders to withdraw not more than Rs 1,000 for six months. The bank was directed to not renew existing loans or sanction new ones. This decision threw consumers into a frenzy, as they queued up outside the bank’s ATMs, demanding their money. Pic/Sameer Markande
Customers lined up outside the banks to withdraw their money and filed complaints against top officials, while the bank’s suspended MD Joy Thomas assured them that their money was safe.
Several government employees have their salary accounts in the PMC bank. The Central Railway (CR) sent a letter to the divisional railway manager and asked them to pay employees through cheques. Meanwhile, on September 26, RBI increased the withdrawal amount to Rs 10,000. Pic/Suresh Karkera
On September 27, Joy Thomas said the bank had approached the Reserve Bank of India (RBI) on September 19 to seek help to regularise unclassified loans worth Rs 2,500 crore for the past seven years.
On September 30, a first information report (FIR) was registered against Thomas, the bank’s former chairman Waryam Singh and other directors of PMC bank, along with HDIL directors Rakesh and Sarang Wadhawan. The FIR mentions that loans granted to the HDIL group and others during 2008-2019 were not paid back. Pic/PTI
EOW arrested Rakesh and Sarang Wadhwan on October 2 for allegedly siphoning off Rs 6,500 crore in unreturned loans via several dummy accounts, former PMC MD Thomas on October 3 and former chairman Waryam Singh on October 4.
On October 3, the RBI also increased the withdrawal limits for depositors to Rs 25,000 from Rs 10,000 over the next six months. Pic/PTI
EOW said Singh played an important role in the fraud, as he was not only the PMC bank chairman, but also an HDIL executive director at the same time. However, the decisions were taken by Thomas. Pic/Ashish Raje
EOW also searched residences of Waryam Singh and froze his Demat account worth Rs 100 crore. Besides these, properties of HDIL worth Rs 3,500 crore were also provisionally attached by the agency. Further raids found that HDIL directors Rakesh Kumar Wadhawan and his son Sarang Wadhawan have a property of over 2.5 acres in Alibaug. Pic/Faizan Khan
Preliminary investigation indicates that a few PMC employees have tampered with the bank's software, owing to which 44 accounts mentioned in the FIR did not reflect in the banking system. On October 10, finance minister Nirmala Sitharaman met the customers of the bank. Pic/PTI
The scam took a political turn where further raids on October 11 found that HDIL promoters gifted several flats and commercial spaces in Kaledonia, in Andheri (East), to families and friends of politicians holding portfolios in the central as well as the state government. Meanwhile, consumers have been protesting outside the court where the culprits are being tried.
Sources exclusively told mid-day that EOW has discovered that Thomas had operated under another identity – of Junaid Khan – which was used to purchase 10 properties, according to ANI. He converted to Islam and married his assistant as per Islamic rituals in 2012. Investigating agencies also found documents that suggest he had several investments under that name as well as his second wife. Thomas' second wife is said to own nine flats in Pune and a boutique. Meanwhile, a Mumbai court had sent Waryam Singh and HDIL promoters Rakesh Wadhawan and Sarang Wadhawan to police custody till October 16.
On October 17, the Economic Offences Wing (EOW) of Mumbai Police arrested one of the directors of the Punjab and Maharashtra Co-operative (PMC) Bank, S Surjit Singh Arora, 65, after his involvement in the scam surfaced during the investigation. According to sources, for the past four to five years, Arora received crores of rupees from HDIL. Meanwhile, the HDIL promoters in a letter requested the ED to sell off their attached assets at fair market value, monetise it and begin the process of repaying loans to the PMC bank. The attached assets included a Ferrtti Yacht 881, a Falcon 2000 Aircraft owned by Privilege Airways Ltd and high-end cars owned by Rakesh and Sarang Wadhawan among other things.
On October 18, a special PMLA court sent Rakesh and Sarang Wadhwan to ED custody till October 22 in connection with the case. Moreover,Union minister Prakash Javadekar sought a probe against NCP leader Praful Patel in the PMC Bank scam. He alleged that huge loans were approved on phone calls during the Manmohan Singh government, which weakened the financial condition of state-run banks. On October 22, the bank raised the withdrawal limit to Rs 50,000 or more for health and education reasons.
On November 5, Surjit Singh Narang, one of the directors of PMC Bank, claimed in his anticipatory bail plea in court that he was not aware of the loans given by the bank to the HDIL group. Two auditors were arrested on November 11 for deliberately overlooking the alleged irregularities involved in the banks functioning. The auditors were identified as Jayesh Sanghani of Ashok and Jayesh Companies and Ketan Lakdawal of Lakadwala and Associates. They were produced in court on November 13 and were sent to EOW's custody till November 15. According to EOW, Lakdawala and Sanghani audited and signed the financial statements of the PMC Bank when the fraud was committed. The agency also said the duo shielded the non-performing asset (NPA) accounts from the Reserve Bank of India's for a long time. Initial investigation have also revealed that the two auditors are business associates and have on many occasions passed on the responsibility of audits of the PMC Bank to each other.
The EOW also arrested Ankita Kirdat, 35, an internal auditor of the bank. According to EOW, it was her responsibility to timely examine financial transactions of the bank. The investigation has revealed that she, too, ignored the alleged fraud in the bank. An officer said it is necessary to interrogate her in police custody as to understand what benefit she got for overlooking illegal financial transactions within the bank like other auditors. She was also responsible for monthly audit of all transactions, but she did not point out the ongoing financial irregularities in the bank.
Meanwhile, viral photos of the Maharashtra governor with former BJP legislator Sardar Tara Singh's son Rajneet Singh, an accused in the scam, have aroused suspicion that he was being shielded in the case. While the NCP has alleged that EOW is working under the BJP's pressure, depositors demand to know who is protecting him.
Throughout these developments, the depositors have been protesting outside PMC Bank branches across the city. According to a official, On October 25, a group of scam-hit Punjab and Maharashtra Cooperative (PMC) Bank depositors were stopped from protesting in front of Varsha, the official residence of the Maharashtra chief minister in the metropolis' Malabar Hill area.
In the meantime, seven of the depositors who had huge amount of money deposited with various branches of PMC Bank have reportedly died either due to suicide, cardiac arrests or delay in treatment, as they were not able to use the money from their account.
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