Published: Fri, October 04, 2019
Markets | By Otis Pena

Suspended MD Of PMC Bank Arrested In Alleged Rs 6,500 Crore Fraud

Suspended MD Of PMC Bank Arrested In Alleged Rs 6,500 Crore Fraud

On Friday, the Enforcement Directorate raided six places in Mumbai and adjoining areas and registered a money- laundering case based on the FIR filed by the EOW in the PMC Bank case.

Rakesh Wadhawan and his son Sarang Wadhawan, accused of loan default, have been arrested by the Economic Offences Wing (EOW).

Both father and son were summoned to the EOW office of Mumbai Police and when the sleuths found that they were not cooperating in the probe, they arrested them.

The FIR named former PMC Bank chairman Waryam Singh, Thomas and other senior officials, besides the Wadhawan duo.

On the PMC scam, Mr. Das said the RBI acted very swiftly and promptly after it was brought to its notice.

HDIL has sent a disclosure to exchanges after the confession letter by former PMC Bank MD Joy Thomas, saying the company will take necessary steps and extend full cooperation with all agencies/authorities.

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They also created fictitious accounts of companies which borrowed small sums of money, and created fake reports of the bank to hide from the regulatory supervision, it said.

Meanwhile, in a relief to the harried customers of PMC Bank, the RBI has increased the withdrawal limit for accounts from Rs 10,000 in six months to Rs 25,000 in the same period.

The bank will also not be able to "grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties" without prior approval in writing from the RBI, the central bank said. The bank's exposure to Housing Development and Infrastructure Limited is over Rs 6,500 crore-four times the regulatory cap, or 73% of its entire assets of Rs 8,880 crore.

The police complaint against PMC and HDIL officials was filed at the behest of an administrator, whom the RBI appointed last week to oversee the bank's operations.

Ten of 44 accounts which led to PMC Bank falling in debt were linked to HDIL and Wadhnwans.

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