PMC Bank case: Ex-chairman Waryam Singh held
This is fourth arrest, with the EOW has already arrested former managing director of the bank Joy Thomas, and promoters of HDIL group Rakesh and Sarang Wadhawan in the case.05-10-2019
05-10-2019
PMC Bank case: ED files PMLA case, raids 6 locations in Mumbai
The ED has filed a money laundering case in the Rs 4,355 crore PMC Bank fraud and also registered an ECIR, equivalent to FIR, against crisis-hit real estate firm HDIL and its promoters.04-10-2019
HOUSING DEVELOPMENT & INFRASTRUCTURE LTD. - 532873 - Clarification sought from Housing Development and Infrastructure Ltd
The Exchange has sought clarification from Housing Development and Infrastructure Ltd on October 04, 2019, with reference to news appeared in www.financialexpress.com dated October 03, 2019 quoting "PMC bank issue fallout: HDIL promoters arrested after dubious loans discovered"The reply is awaited.04-10-2019
As more skeletons tumble out of the PMC closet, customers face the brunt
by Sandhya Krishnan and Ritmbarah Arora It looks like the woes of the financial sector aren’t about to end – be it mounting NPAs and defaults, considerable lending exposure to high risk sectors, higher provisioning, credit downgrades of borrowers and worst of all, the emergence of scams. The latest entrant in the troubled banks’ list is Punjab & Maharashtra Co-operative Bank (PMC), a Mumbai based cooperative bank, where a banking scam surfaced with possible ramifications to the tune of $1 billion. Arrests of senior management suspected of fraud involvement have quickly happened. But the length of the scam raises concerns on regulatory oversight and the ignoring of early red flags. Role of HDIL: Tip of the iceberg or a deeper rot? People in the know have revealed that the fraud might have first begun way back in 2008, with bank officials allegedly creating accounts with fictitious names to fund sinking real estate company HDIL for over a decade. The involvement of the top management, including that of suspended MD has also come to light, where Rs 6,226 cr or the equivalent of 73% of PMC’s loan book was extended to HDIL. It is also alleged that in spite of the PMC bank Chairman being part of HDIL’s Board, the loans were not classified as a related party transaction. These are gross violations of prudential banking norms. In fact, PMC lent Rs 98 cr to HDIL in Aug 2019 to fend off NCLT proceedings. HDIL filed for bankruptcy recently. It is believed that RBI’s digitalization push has helped expose fraudulent practices. In fact, RBI red flagged the issue of Chairman’s interest in HDIL and recommended his removal to the central registrar, the body that oversees the functioning of multi-state cooperative banks. This request was not acted upon and the Chairman continued working until his recent removal by RBI. Latest setbacks for PMC There have been a large deposit withdrawals from the Punjab & Maharashtra Co-operative Bank (PMC Bank) in a span of a few days, as a result of which RBI placed a curb on the bank activities. The large withdrawals started on September 19, amounting to more than 5% of total deposits. These withdrawals and the attendant capital erosion forced RBI to place restrictions on withdrawals on September 23. The bank’s total deposit base was reported to be over Rs. 11,500 crore at the end of March 31. Apart from the withdrawal of deposits, PMC Bank has also been active in the issuance of Letter of Credits (LCs). The total contingent liability of the bank was reportedly around Rs. 1,721 crores as on March 2019. About Rs 176 crore of LCs issued by the bank and discounted by other banks is expected to fall due shortly. PMC Bank will be required to repay these banks at the end of the tenure of LCs. The RBI has barred PMC Bank from carrying out regular banking activities in the meantime. The Mumbai Police has filed a case against the former bank management and HDIL, and said that a special investigation team will be scrutinizing the case. RBI to the rescue RBI swung into action and took a series of steps to address the situation. The Central Bank superseded the PMC Board and appointed Jai Bhagwan Bhoria to function as the bank administrator. Prior to this, RBI had restricted the withdrawal limit of depositors to Rs 10,000 for the next 6 months, hiking it from the previous restriction of Rs 1,000 following a public outcry by bank customers. The new limit will allow 60% of the bank’s depositors to withdraw all of their money. The grounds cited by RBI were ‘’necessitated on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposure.” Commenting on how a scam of such a magnitude went undetected, MoS Finance, Anurag Thakur said “PMC is an eye-opener for the banking sector that such incidents should not take place at the outset. It also raises a question mark on the role of various people, including regulators, auditors and bank directors. Government will look into all areas as it impacts the common man.’’ Unanswered questions Several questions remain unanswered in the scam involving the money of mainly small savers of a bank that boasts of operations spanning over 7 states. It raises skepticism of why the PMC Board, auditors and RBI were kept in the dark for such a prolonged span of time. The flagrant violation of lending to a single entity in excess of the regulatory cap is alarming. If one goes by the annual report numbers, it suggests a rather different story - one of healthy capital adequacy i.e. over the required 12% and NPA ratio of less than 4%. While, it is too early to comment on the validity of the fraud occurrence, one thing’s for sure, the end sufferers remain the depositors. Time to weed out rotten apples in the financial sector The financial sector is seeing its fair share of troubles, having witnessed ICICI Bank’s internal fraud perpetuated by the erstwhile CEO, IL&FS; default, high profile borrowers who duped SBI and PNB, distressed condition of Reliance Capital, DHFL and and concerns over asset quality and capital adequacy in case of Yes Bank and Lakshmi Vilas Bank respectively. While the above episodes exposed the fault lines in the financial sector, it has also served as a wakeup call. Perhaps to further strengthen the industry, it might be prudent to tighten disclosure and lending norms, and even merge or liquidate fragile players, who fall short of required capital or are unable to stay profitable in spite of a long tenure of operations, so as to avoid further pain or shocks in the system. The financial services sector, especially banking, which is the backbone of the economy has a crucial role to play in helping India achieve its goals of becoming a $5 trillion economy by 2024. The name of the game should be quality over quantity.03-10-2019
Private airline linked to HDIL promoters put on the block
Mumbai International Airport Limited issues public notice cautioning potential buyers of the airline02-10-2019
Adequate security cover provided for loans taken from PMC Bank: HDIL
HDIL said it was facing temporary cash flow issues due to the external environment in the real estate sector01-10-2019
Housing Development and Infrastructure Ltd - 532873 - Clarification Regarding Media Report
Clarification Regarding Media Report01-10-2019
HOUSING DEVELOPMENT & INFRASTRUCTURE LTD. - 532873 - Disclosure of Voting results of AGM (Regulation 44(3) of SEBI (LODR) Regulations, 2015)
Housing Development and Infrastructure Ltd has informed BSE regarding the details of Voting results of AGM, under Regulation 44(3) of SEBI (LODR) Regulations, 2015. Kindly Click here30-09-2019
Housing Development and Infrastructure Ltd - 532873 - Shareholder Meeting / Postal Ballot-Scrutinizer''s Report
Voting Result of AGM under Regulation 44(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015 along with the Scrutinizers'' Report of the 23rd Annual general Meeting of the Company28-09-2019
HOUSING DEVELOPMENT & INFRASTRUCTURE LTD. - 532873 - Shareholder Meeting / Postal Ballot-Outcome of AGM
Proceeding of the 23rd Annual General Meeting held on 28th September, 201928-09-2019