Two days after the Reserve Bank of India imposed restrictions on Punjab and Maharashtra Cooperative (PMC) Bank, a Mumbai based urban cooperative bank, several of its customers filed a joint police complaint on Thursday against the bank’s chairman and its directors for alleged misappropriation of funds of the customers.
According to a reports, the group of distressed customers went to Sion police station in central Mumbai with a written complaint against the bank officials.
The delegation in its complaint alleged that at least 14 people, including the PMC Bank’s chairman and all its directors, were involved in misappropriation of funds of the account holders, a police officer aware of the matter said.
Along with seeking an explanation, the delegation of customers have urged the police to take appropriate action against the accused and also asked the police to seize their passports so that they do not flee the country.
“We have received a written application from account holders of the PMC Bank. Further action will be taken after examining the complaint,” the police officer said.
The Reserve Bank of India on Tuesday imposed restrictions on Punjab and Maharashtra Cooperative Bank, a Mumbai based urban cooperative bank. According to a direction issued on September 24, RBI said that the account holders will not be able to withdraw more than ₹1,000 from their accounts.
The bank will also not be allowed to grant or renew any loans, make any investment, sell any properties without prior approval of RBI. These restrictions were placed for a period of six months.
But the RBI notification clarified that this should not be taken as a cancellation of banking license of the bank. The bank will continue to undertake banking business with restrictions until further notice/instructions.
The Punjab and Maharashtra Cooperative Bank had been put under regulatory restrictions by the RBI owing to irregularities disclosed to the apex bank. In a message sent to the shareholders, the bank’s Managing Director Joy Thomas said, “I regret to inform you that your PMC Bank has been put under regulatory restriction under Section 35A of B.R. Act by RBI for a period of 6 months due to irregularities disclosed to RBI. As the MD of the Bank, I take full responsibility and assure all the depositors that these irregularities will be rectified before the expiry of six months.”
Yesterday, the bank had tried to reassure its customer by saying it has enough liquidity to meet all liabilities of its customers and that the the depositors’ money was safe. It admitted that one large account – HDIL, a real estate company – was the sole reason for its present crisis.
Sources said that the biggest reason for RBI’s action against the bank was a loan of Rs 2,500 crore to this company (HDIL) which has declared bankruptcy. The PMC Bank’s auditors did not classify the loan to HDIL as an NPA despite the HDIL defaulting on repayments, and the RBI finally put its foot down and termed the loan as a “complete loss”.