MUMBAI: The RBI Bank had reportedly recommended removal of the scam-hit Punjab and Maharashtra Cooperative Bank chairman Waryam Singh last year after it had found out his involvement in sanctioning loans to realty developer HDIL and related-entities without proper due diligence and much above the regulatory limits, a source has said, reports PTI.
Singh, however, continued to remain the chairman until recently, the person familiar with the development said.
The Reserve Bank of India recommendation was sent to the Registrar of Cooperative Societies of Maharashtra which has administrative control over the coop banks in the state.
Neither the registrar nor Singh could be contacted immediately for comments. The latest tranche of Rs 96.5 crore was disbursed only on August 31.
It needs to be noted that Singh was on the board of HDIL from 2006 to 2015 as a non-executive director and held 1.91 per cent stake in the now crippled company, which could possibly be a conflict of interest.
Singh stepped down from the board in March 2015 before selling his entire stake in the company.
Cooperative banks keep failing as there is a dual control -- by the RBI and the state where they are registered. Moreover, almost all these entities are controlled by politicians.
This dual control has been blamed for the oft-repeated crisis at cooperative banks. In fact, PMC is the 24th UCB to be put under RBI administrator this year alone.