PMC Bank tells RBI will recast balance sheet at the earliest

Withdrawals were initially limited to Rs 1,000 per account. The limit was subsequently relaxed to Rs 25,000 and then to Rs 40,000.

Representatives from Punjab & Maharashtra Cooperative (PMC) Bank on Wednesday met Reserve Bank of India (RBI) governor Shaktikanta Das and other senior officials to update them on the bank’s position after the recent relaxation of the withdrawal limit of deposits to Rs 40,000. The RBI-appointed administrator and members of the bank’s advisory committee told officials of the the central bank that PMC Bank would recast its balance sheet at the earliest “so as to arrive at the true and fair picture of its accounts.”

“While discussing the various operational issues, it was informed that the bank would expedite the processes of assessment of the realisability of the securities available with the bank,” the bank said in a statement. Bank officials also informed RBI officials that a forensic audit is currently underway. The bank’s representatives also assured the RBI of all efforts to safeguard the interest of PMC Bank’s depositors and other stakeholders.

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On September 23, the RBI had imposed regulatory restrictions on deposit withdrawals on PMC Bank after finding irregularities, and misreporting of loans given to real estate developer Housing Development & Infrastructure (HDIL). PMC Bank had reportedly loaned over 70% of its Rs 9,000-crore in advances to HDIL.

Withdrawals were initially limited to Rs 1,000 per account. The limit was subsequently relaxed to Rs 25,000 and then to Rs 40,000. With the present limit, reportedly over 70% of the bank’s depositors would be able to withdraw their account balance.

Earlier this month, the Economic Offences Wing (EOW) arrested PMC Bank’s former managing director Joy Thomas for his suspected role in an alleged fraud. The EOW has also arrested former promoters of HDIL Sarang Wadhawan and Rakesh Kumar Wadhawan.