Face of Nation : Investigative agency Enforcement Directorate (ED) on Friday conducted searches at six locations in Mumbai in connection with the Punjab and Maharashtra Co-operative Bank fraud. The agency also registered an Enforcement Case Information Report (ECIR) against erring bank officials on the basis of FIR filed by the Mumbai Police.
Searches are being conducted by the ED a day after Mumbai Police’s Economic Offences Wing (EOW), which is investigating the nexus between PMC Bank and defunct realty major Housing Development and Infrastructure Limited (HDIL), had arrested the CEO and managing director of HDIL on Thursday.
PMC Bank officials allegedly deposited around Rs 2,000 crore directly into HDIL bosses’ personal accounts while the loans were officially sanctioned under the company’s name.
Mumbai Police has already arrested Chairman and Managing Director of HDIL Rakesh Kumar Wadhawan and Sarang Wadhawan into custody. A case was also registered by police against bank officials and Wadhawans for cheating, forgery and several other violations.
As police dig deeper in the case, some startling details about how loans were awarded to now-defunct HDIL has come to the fore. On Thursday, police said bank officials helped the HDIL bosses by depositing money in their personal accounts.
The Wadhawans were summoned by the EOW’s Special Investigation Team (SIT) for questioning in the case on Thursday as well. However, they were arrested after they failed to cooperate with the investigators. The authorities investigating the case also froze the company’s assets to the tune of Rs 3,500 crore.
Suspended PMC managing director Joy Thomas’s confession letter revealed that top bank officials helped HDIL get loans and created 44 hidden accounts and secured it with passwords to protect them from being detected during audits conducted by RBI officials.
These accounts with fake credentials helped hide the number of loans borrowed by HDIL which later turned into NPAs (Non-Performing Assets) for the bank leading to the exposure of thousands of crores.
“The conduct of the bankers is intentional and has led to omission and non-compliance which points out their direct role in helping the borrower. PMC employees tampered with the software and that is why the 44 accounts mentioned in the FIR did not reflect in the system. Several employees are being questioned by SIT officials, said a senior police officer privy to the investigation.
The PMC Bank crisis came to light after RBI had imposed restrictions on the bank citing multiple violations in operations. The bank had been flouting rules for almost six to seven years and now it has an exposure of Rs 6,500 crore to HDIL–that is 73 per cent of the total assets of the PMC bank.
