PMC Bank reported HDIL loan of only Rs 420 crore
MUMBAI: The beleaguered Punjab and Maharashtra Co-operative (PMC) Bank had allegedly misreported the unpaid loans of real estate firm Housing Development Infrastructure Limited (HDIL) to the Reserve Bank of India (RBI), the probe by the Enforcement Directorate (ED) has revealed.
According to the ED, the bank reported merely Rs 420.03 crore to the RBI when the actual outstanding loans stood at Rs 6,117.93 crore till August 2019. In the process, the bank hid the loan of Rs 5,697crore to avoid scrutiny and restrictions on its operations that could lead to its collapse. Moreover, the collateral securities kept by HDIL were purportedly never sold for the recovery of loans.
Of the reported loans, the bank told the RBI that the principal amount owed by HDIL was Rs 400.08 crore and the interest amount was Rs 1.95 crore. However, the non-reported outstanding loan was Rs 5,697.90 crore, with Rs 2,140.84 crore as the principal amount and Rs 3,557.06 crore as the interest.
"Thus, the aggregate loan outstanding against HDIL group stood at Rs 6,117.93 crore, with Rs 2540.92 crore as the principal amount and Rs 3,577.01 crore as the interest," sources in the ED said.
The ED probe has revealed that the bank allegedly did not comply with the RBI norms related to declaration of unpaid loans as Non-Performing Assets (NPA) when it came to HDIL. A loan has to be declared as NPA if the loan-taker fails to service (make payments against) the loan's interest consistently over a period of three months or 90 days. "However, time and again the overdraft limit was enhanced to accommodate the outstanding interest amount," the source said.
Meanwhile, the bank's statutory auditors told the agency they were allegedly not provided the actual financials of the bank and fabricated figures were shown to the public to attract funds that were later utilised for giving loans to the accused firms. All the accused in the case have denied the ED's charges in court.
According to sources, the bank's former managing director Joy Thomas in his statement to the agency claimed that the loans to HDIL were not reported as the amount had exceeded the regulatory limits. He said the bank feared it would lose its reputation. Thomas, along with HDIL and its two promoters, was among those chargesheeted by the ED in the case a fortnight ago.
In his statement to the ED, Thomas said that HDIL's track record of repaying loans was allegedly the only factor considered in the initial decision to grant it loans and no other parameters had been adhered to. He said a process was started to create a cover for the loans only after the group began defaulting on paying the outstanding dues.
The bank then began calling for documents including titles deeds of assets and conducted a fresh valuation at the ready reckoner rates.
As per ED's enforcement case information report, which was registered in October 2019, HDIL was accused of causing a loss of Rs 4,335.46 crore to PMC Bank by failing to pay loans drawn since 2008.
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