PMC Bank crisis: MD Joy Thomas arrested in Rs 4,355 fraud case

85b6078fc61ada1ac9561dd2dfe377a4MUMBAI :Joy Thomas, the suspended managing director of crisis-hit Punjab and Maharashtra (PMC) Bank, has been arrested in an alleged Rs. 6,500 crore fraud case, sources in the Economic Offence Wing in Mumbai said.
In a  major crackdown on the Punjab and Maharashtra Cooperative (PMC) Bank crisis, the Economic Offences Wing (EOW) of the Mumbai Police, on Thursday have arrested Housing Development and Infrastructure Limited (HDIL) directors Sarang Wadhawan and Rakesh Kumar Wadhawan. Sources report that property worth Rs 3500 Crores have been frozen by the police.
The arrest comes on a day when the former board members of PMC and senior executives of its borrower Housing Development and Infrastructure Ltd (HDIL) were charged with money-laundering by the Enforcement Directorate.20190927260L_1570195283206_1570195299595
The agency conducted searches at six places in Mumbai and neighbouring areas linked to the former chairman of the bank and promoters of HDIL.Rakesh Wadhawan and Sarang Wadhawan, senior executives at HDIL, are in police lockup till October 9.

PMC Bank gave 75 per cent of its entire loan book to the now bankrupt HDIL. The two HDIL promoters allegedly created 21,000 fake accounts to camouflage the loans from PMC.
Reacting to the arrest, BJP leader Kirit Somaiya has hailed the Mumbai police and stated that withing two days PMC Bank’s previous chairman Waryam Singh and MD Joy Thomas will also be arrested. He added that the matter has been forwarded to the Enforcement Directorate(ED) as a case of money laundering was involved.
Earlier on Monday, the EOW had registered an FIR against the senior officials of PMC Bank and HDIL in connection with a fraud of over Rs 4,355 crores. Police stated that a special investigation team has been formed to probe into the issue.
According to the police, PMC Bank officials gave loans to HDIL between the year 2008 and August 2019 despite not paying the previous loans. The FIR has been registered on the complaint given by Jasbir Singh Matta, who was authorized by RBI administrator with Mumbai Police
Earlier last week, PMC had admitted that one large account-HDIL was the sole reason for the present crisis, as per PTI. The bank’s former managing director Joy Thomas had allayed fears stating all accounts were safe and fully-secured.
He said the bank has cash liquidity of around Rs 4,000 crore in the form of SLR (statutory liquidity ratio) and CRR or cash reserve ratio. But, he admitted that the problem arose because of under-reporting of NPAs from the HDIL account.
On September 26, Reserve Bank of India (RBI) hiked withdrawal limit to Rs 10,000 from Rs 1,000 for PMC’s depositors, according to PTI. This development came two days after RBI took control of the bank for six-months.
It had also capped withdrawals at ₹1,000 per account and the bank is not allowed to make any fresh loans for six months. This announcement by the Central bank caused chaos throughout the financial capital, with panicked account holders crowding the bank.
(With Inputs from Mumbai Bureau).



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