PMC’s publicity to HDIL is almost 73 per cent of its complete mortgage ebook measurement of Rs eight,880 crore
Punjab Maharashtra Financial institution (PMC) Managing Director Pleasure Thomas has admitted to deceptive the RBI for six years by concealing and misreporting default on loans reportedly price greater than Rs 6,000 crore taken by crisis-hit actual property agency Housing Improvement and Infrastructure Ltd (HDIL). In a letter addressed to the central financial institution, Mr Thomas, who has been suspended for his position within the disaster and named in a primary info report (FIR), stated the financial institution had hid info from board members, auditors and regulators because of “fear of reputational loss”.
“… As the loans outstanding were huge and if these were classified as NPA (non-performing assets) it would have affected the profitability of the bank… this would have created reputation risk for the bank. As the HDIL group had a good record of clearing dues with certain delays we continued to report all the accounts as standard accounts,” Mr Thomas’s letter learn.
“Though some of the accounts were not performing well, it was not brought to the notice of the board… subsequent overdues of various loans were also not reported… concealment of information from board, auditors and regulators was due to the fear of reputational loss,” the letter stated.
PMC’s publicity to HDIL is almost 73 per cent of its complete mortgage ebook measurement of Rs eight,880 crore as of September 19, PTI reported quoting an unnamed supply. In 2006/07 that determine was Rs 500 crore and it was Rs 1,026 crore in 2011.
Within the six-page letter, Pleasure Thomas particulars the beginning and progress of the connection between PMC Financial institution and HDIL and refers to a minimum of three events during which the corporate infused funds when the financial institution was struggling, together with a Rs 100 crore cost in 2004.
He additionally explains that “… in connection with their (land) business their accounts used to get overdrawn and thereafter they used to get cleared also in due course of time. In the process, our bank used to charge 18 per cent to 24 per cent interest and earned very good profit”.
The letter goes on to say that when RBI officers started asking for particulars in 2017 “… stressed legacy accounts belonging to this group were replaced with dummy accounts…”
The letter concludes with Mr Thomas taking full duty for “granting of overdrawals”. “The executives had no role in allowing overdrawals… they were doing it as per my instructions…,” he concluded.
Chatting with the press on Friday, he additionally assured irate clients they might not lose their cash.
“Whatever has happened is not a fraud, nobody has run away with the money without providing security, it is a technical matter which could have been managed better,” Mr Thomas stated. He additionally accused the RBI of failing to handle the scenario.
In the meantime, a police case has been filed in opposition to Sarang Wadhwan and Rakesh Kumar Wadhwan (who has been named in Mr Thomas’s letter).
The PMC financial institution disaster made headlines final week after the RBI restricted withdrawals to a sum not exceeding Rs 1,000 for a interval of six months, in a transfer that led to protests by clients. The restrict was raised to Rs 10,000 however indignant clients continued to protest.
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