Mumbai police’s EOW files FIR in PMC Bank case, SIT formed to probe case

New Delhi: Mumbai police's Economic Offences Wing filed FIR against HDIL, and Punjab & Maharashtra Cooperative (PMC) Bank officials, including suspended MD Joy Thomas in PMC bank fraud case. EOW has formed a Special Investigation Team (SIT) to probe the matter. The first information report (FIR) has been filed under sections 409 (criminal breach of trust by a public servant or banker), 420 (cheating), and 465, 466 and 471 (related to forgery) of the Indian Penal Code along with 120 (b) (criminal conspiracy).

FIR alleges possible fraud and wrongful loss of ₹4,355 crore and charges of cheating against HDIL.

"Joy Thomas and board members did not paint a true picture to RBI. PMC Bank board held back information on NPAs deliberately," the FIR stated.

Despite non-payment, the bank officials did not declare HDIL exposure as non-performing asset and intentionally hid the information about the same from RBI by creating fake loan record of smaller loan account, an official statement from the police said.

Apart from Thomas, the bank's former chairman Waryam Singh and other senior officials, along with the director of HDIL, Wadhawan, have also been named in the FIR. First name of Wadhawan was not immediately available, said PTI news agency.

Explaining the modus operandi of the case, the FIR said HDIL promoters allegedly colluded with the bank management, to draw loans from the bank's Bhandup branch, PTI reported.

The development comes at a time when the lender's suspended MD reportedly admitted to the RBI that the bank's actual exposure to the bankrupt HDIL is over ₹6,500 crore — four times the regulatory cap or a whopping 73% of its entire assets of ₹8,880 crore.

The slum redevelopment focused Housing Development and Infrastructure or HDIL is in the bankruptcy court now after being hit by a severe cash crunch following the failure of some of its key projects in the city.

Earlier on Monday, the Reserve Bank of India (RBI) superseded the Board of crisis-hit Punjab and Maharashtra Cooperative Bank Ltd and appointed Jai Bhagwan Bhoria as the administrator of the bank.

On September 23, the RBI had imposed regulatory restrictions on the PMC Bank for six months over alleged financial irregularities.

The withdrawal limit for account holders was initially kept at ₹1,000 per each customer for six months, which was later raised to ₹10,000.

The regulator has also banned the cooperative from extending fresh loans or taking deposits.