People thronged outside PMC bank in Andheri's Poonam Nagar
People thronged outside PMC bank in Andheri's Poonam Nagar
B.L. Soni

Punjab and Maharashtra Cooperative (PMC) Bank Managing Director Joy Thomas, in an interview with CNBC-TV18 on September 25, said that the depositors' money is safe, after the RBI put the lender under restrictions.

"We have ample assets to cover all liabilities of the depositors," Thomas said.

The central bank put PMC Bank under restrictions for six months, meaning the lender cannot give fresh loans and accept fresh deposits during the period.

Withdrawals have been capped at Rs 1,000 per account. These restrictions are put when there are three consecutive years of adverse supervisory report. The move resulted in chaos outside its branches in the financial capital.

According to a Times Of India report published on September 25, a loan of Rs 2,500 crore to real estate firm Housing Development and Infrastructure Limited (HDIL) — now-bankrupt — is the main reason behind the downfall of PMC Bank.

The report, citing sources, claimed that despite the defaults by HDIL on repayments, PMC Bank’s auditors did not classify the loan to the real estate company as an NPA.

However, Thomas termed the news reports of Rs 2,500 crore loans to HDIL as "incorrect", saying the amount is lower than what was mentioned in the reports.

The MD said that it was not a single group or company that was responsible for the current state of PMC Bank.

"I cannot disclose the name of the companies right now as it is not a single group or company. The investigation is going on and more details can only be revealed after that," he told CNBC-TV18.

Thomas said that RBI imposed restrictions on the bank because of divergences in NPAs but added that the step taken by the central bank is too harsh. "RBI could have restricted only the lending," he said.

Thomas further assured that the bank will come out of the situation very soon and will repay the depositors.

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