The Punjab and Maharashtra Co-operative Bank had more than 21,000 fictitious accounts

Mumbai: The Punjab and Maharashtra Co-operative Bank had more than 21,000 fictitious accounts, where lesser volumes of non-refundable loans were shown during audits.

Result: The actual financial position of the bank was fudged and the bank kept up the pretence that its financial parameters were not under stress. More important, the dummy loan accounts were not entered into the bank's core banking system — a key factor in perpetrating the fraud.

As against this, HDIL had been regularly defaulting on payments to PMC Bank since 2008. However, its accounts were not classified as non-performing and the bank continued to lend to it.

Significantly, of the total non-refunded loans of HDIL, Rs 2008 crore had been allotted to the personal account of reality firm's chairman Rakesh Wadhwan, while another Rs 137.16 crore was funnelled to the account of his brother Sarang Wadhwan, who is the Managing Director of the company. These loans were extended till as late as August 2019.

The disclosure has come during a preliminary assessment carried out by the interim RBI inspection team. It has been revealed that 10 out of the 44 ‘borrowal’ accounts in the bank belonged to HDIL group of companies, including the two personal accounts of the Wadhwan brothers.

The other 8 accounts, with outstanding loans, include --HDIL (Rs 1367.55 crore), Somerset Construction Private Limited (Rs 239.16 crore), Serveall Construction Private Limited (Rs 190.68 crore), Saphhire Land Development Private Limited (Rs 145.59 crore), Emerald Realtors Private Limited (Rs 145.01 crore), Awas Developers & Construction Private Limited (Rs 140.43 crore), Prithvi Realators & Hotels Pvt. Ltd. (Rs 131.96 crore) and Satyam Realators Pvt Ltd (Rs. 129.46 crore).


Wiser after Nirav Modi’s great escape, the Mumbai Police has posted lookout notices for senior officers of the ailing Punjab and Maharashtra Co-operative Bank and for promoters and executives of the Housing Development and Infrastructure Ltd.

These notices have been posted to prevent them from fleeing the country.

On the radar are PMC Bank Chairman Waryam Singh, Managing Director Joy Thomas and members of the Wadhawan family, who are the promoters of HDIL group of companies.


The RBI said on Tuesday that Indian banking system is safe and stable and that there was no need to panic on “rumours”. ‘‘There are rumours in some locations about certain banks, including cooperative banks, resulting in anxiety among the depositors.

RBI would like to assure the general public that Indian banking system is safe and stable and there is no need to panic on the basis of such rumours,” the RBI said in a tweet.

By Debasish Panigrahi

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