MUMBAI: The Punjab and Maharashtra Co-operative Bank (PMC Bank) depositors have expressed their anger against the Reserve Bank of India (RBI) for putting unreasonable restriction on withdrawal.
However, according to sources, the RBI saw five per cent erosion or withdrawal of deposits between September 17 and 19, and by the time the issue was brought up before the central bank and restraint was imposed on September 23, at least 29 per cent of deposits have been withdrawn.
This indicated those who in the know have been withdrawing bulk deposits, and therefore RBI had to bring in a restriction to protect the interest of small investors.
“There could have been a run on the bank if it was not done,” they added. The urban co-operative bank had total deposits of around Rs 11,600 crore as of September 19 and it is estimated that around 63 per cent of that are under Rs 10,000.
The whistleblower complaint and the confession by Joy Thomas, former MD, PMC Bank brought out the fact that a single group, that is loan to HDIL alone was Rs 6,500 crore out of Rs 8,800 crore of advances by the bank.
The issue about Waryam Singh, chairman of the suspended board having links with the HDIL group surfaced and last year RBI had asked the bank to use “moral suasion” to get him removed.
Meanwhile, HDIL whose directors have also been named in the FIR filed by the RBI administrator said that it was unaware of any action against the company and its promoters.
“The company has over a period of time availed of banking facilities from various banks and institutions including PMC Bank in the normal course of business. Adequate security cover in favour of the banks, including PMC Bank have been created over the assets of the company for these facilities in due compliance with all banking regulations as per guidelines described by the RBI,” HDIL said.
But, the confession letter by Thomas shows that just when the issue was about to explode the bank went around creating second charge on securities already mortgaged with other banks.
“We met the borrowers on September 21 and they offered immediately to create bank’s charge on assets worth Rs 3,500 crore, already mortgaged with other banks,” a letter said.