Ghost accounts at PMC routed HDIL loans

October 5, 2019 Off By administrator
MUMBAI: A meeting between employees of the credit department at the Punjab & Maharashtra Cooperative Bank and an executive director of the Reserve Bank of India (RBI) might have been the spark that eventually blew the lid off the scam at the bank.

The bank allegedly extended privileges to the promoters of Housing Development and Infrastructure Ltd (HDIL) including allowing them to operate password protected ‘masked accounts’ through which over 70% of the depositors monies was sanctioned as untenable loans.

Four bank officials had flagged off the impending crisis in the bank which compelled the suspended managing director (MD) Joy Thomas to come clean and write a ‘tell all confessional’ letter to the regulator revealing defaults by the HDIL group, sources said. The Mumbai Police have started to record the statements of these employees.

Thomas, who was untraceable since the registration of the FIR on September 30 was tracked down to Powai in suburban Mumbai and brought to the Mumbai Police’s Economic Offences Wing (EOW) office where he was subsequently placed under arrest. He is the third arrest in the case. On Thursday HDIL promoters, Rakesh and Sarang Wadhawan were arrested by the city police.

Meanwhile a local court in Mumbai sent the father-son duo to police custody till October 9.

“The whistleblower in this case includes a bunch of women employees who were with the credit department and were aware of these ghost accounts through which loans were extended to at least 44 borrowers linked to HDIL. These were then camouflaged using another 21,049 fictitious accounts,” said a source.

These officials have revealed since the loans granted to these 44 firms were above permissible limits of RBI, they were broken down into smaller portions and assigned to fictitious companies, a note sheet of which was manually prepared and submitted to the regulators, said one of the sources cited above.

“The senior management including the former chairman, Waryam Singh and MD Joy Thomas allowed the realtor group operate password protected masked accounts. These whistleblowers were aware of this arrangement and developed cold feet to allow the practice to continue which was underway for a couple of years. They then revealed the same to the RBI which compelled Thomas to come out clean in the case,” added the source.


The police is probing a case of evergreeing of loans and these masked loans availed from PMC were used to meet the debt obligations of other banks by the realty developer group. “Initially scrutiny of financial statements indicate diversions and misappropriation of funds in larger amounts,” read the remand application filed before the court.


At the remand hearing Wadhawans told the court that they had written to the government and RBI on Thursday agreeing to the RBI appointed administrator’s suggestion of providing additional security.

“On October 1, we secured an…

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