warned RBI, could have stopped the scam
You must have heard about the PMC Bank scam which was in discussion in the past. Millions of depositors got money stuck in this. When you hear the story of this bank scam, it will look no less than a thriller film. Let us tell the serial story of this scam, the scam which could have been stopped 8 years ago…
You must have heard about the PMC Bank scam which was in discussion in the past. In this, the money of lakhs of depositors was stuck. When you hear the story of this bank scam, it will look no less than a thriller film. In this, you will get all the spices that are suspense thriller films. Let us tell the serial story of this scam, the scam which could have been stopped 8 years ago…
The Reserve Bank of India (RBI) approved the proposal of financial services company Centrum Financial Services and BharatPe to take over PMC Bank about 10 days ago. After this, the depositors of PMC Bank trapped in the scam can get relief. The way for thousands of people to get money is almost cleared.
Centrum Financial Services and BharatPe will form a small finance bank to run this cooperative bank, which will work under the supervision of RBI under an amalgamation scheme. The announcement of this plan is expected soon.
When the PMC Bank Scam was exposed in 2019
When the PMC Bank scam came to light in the year 2019, in September 2019, the Reserve Bank dissolved the board of directors of PMC Bank and put it under regulatory supervision. Along with this, many restrictions were imposed on the bank, which has now been extended till 31 December 2021 till the completion of the acquisition. But the big question is, could this scam have been avoided?
RBI got enough indications of scam
The evidence found by Moneycontrol shows that RBI had received enough alarms and scam signals, which if implemented in time could have prevented this scam, which led to the sinking of PMC Bank. Because 8 years before this scam became public, a whistleblower had warned RBI about the fraud taking place in the bank.
Whistleblower wrote letter to RBI
On January 28, 2011, a PMC Bank official wrote a letter to A Udgata, Chief General Manager, Urban Bank, RBI, informing him about the disturbances in PMC Bank. In this letter, the whistleblower told the RBI about the frauds taking place in the dealings of PMC Bank with HDIL and DHFL.
Let us tell you that later both HDIL and DHFL went bankrupt by drowning in debt. In this letter, the whistleblower had exposed the nexus of PMC Bank officials with HDIL and DHFL. HDIL and DHFL were companies of the same family Wadhawans and action is being taken against them in this matter.
Only then did the whistleblower warn about the scam
The whistleblower had said in his letter that PMC Bank in connivance with HDIL manipulated its deposits and in return the entire black money of HDIL was shown in the cash deposit of PMC Bank. The information about this increased cash limit was not given to RBI. In this regard, the bank’s NPA was also disclosed.
NPAs shown to be underrated
In this letter, Whistleblower said that the actual NPA of PMC Bank was 9%, but the bank showed it to be only 1%. Also, PMC Bank showed a fake deposit of Rs 250 crore in its system. The bank gave a large amount of fresh loans to NPA companies such as DHFL and HDIL.
gave arbitrary loans
These loans were given in the name of relatives or partners of the directors of these companies. Then the NPA was settled from this loan. Fake deposits were shown to increase the loan book of the bank. The whistleblower had asked the RBI to investigate the matter.Â
RBI took cognizance of this letter and on 7 March 2011, ordered an inquiry into the matter to PMC CEO Joy Thomas, who was later arrested in this case.
Only the investigator met the thieves
Investigation revealed that Joy Thomas changed his religion to Junaid Khan to marry a personal assistant and gifted 9 flats to his wife in Pune. Moneycontrol has reviewed a copy of this letter. RBI did not comment for this article.
fraud in bank audit
This scam did not come to the fore at that time, as the person who was entrusted with the investigation by RBI was himself in connivance with the scamsters and was involved in this conspiracy. Apart from this, in 2018-19, statutory auditors gave A rating to PMC Bank in their audit classification. This rating was given at a time when there was massive fraud in the bank.
The role of auditor Lakdawala and Co is also under investigation in this case. Moneycontrol could not get in touch with the auditor in this matter as no website or email of the auditor is available. In this case, the auditors failed to spot the bank’s fault and gave it the top rating. Had RBI and auditors done their job properly, this scam could have been prevented.
fraud in bank audit
This scam did not come to the fore at that time, as the person who was entrusted with the investigation by RBI was himself in connivance with the scamsters and was involved in this conspiracy. Apart from this, in 2018-19, statutory auditors gave A rating to PMC Bank in their audit classification. This rating was given at a time when there was massive fraud in the bank.
The role of auditor Lakdawala and Co is also under investigation in this case. Moneycontrol could not get in touch with the auditor in this matter as no website or email of the auditor is available. In this case, the auditors failed to spot the bank’s fault and gave it the top rating. Had RBI and auditors done their job properly, this scam could have been prevented.
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