New Delhi, October 04: Finally, moving a step ahead to the fair justice of distressed depositors of the PMC bank, the Enforcement Directorate on Friday has charged the former bank board members and the promoters of crisis-hit real estate firm HDIL with money laundering in the Rs 6,500 crore loan default case.
While the complaint has been lodged under the Prevention of Money Laundering Act, the agency is conducting searches at six places in Mumbai and neighbouring areas linked to the former chairman of the bank and promoters of crisis-hit real estate firm HDIL. However, on Thursday, the RBI also raised withdrawal limit for account holders to Rs. 25,000 from earlier withdrawal limit of Rs. 10,000.
Two directors of HDIL that set off the crisis at PMC Bank by defaulting on loans worth nearly Rs. 6,500 crore were arrested on Thursday. Rakesh Wadhawan and Sarang Wadhawan, senior executives at Housing Development and Infrastructure Ltd, were arrested by the Economic Offences Wing of the Mumbai Police. The Wadhwan brothers will be produced in a Mumbai court today.
The Wadhawans were also named in a police complaint that accused the bank's management of concealing non-performing assets and disbursing loans to HDIL leading to a loss of at least Rs. 4,300 crore, in the latest banking fraud case to spook the country's depositors and investors.
The PMC case has sparked renewed concerns about the health of India's troubled banking sector, which has been rocked by a multi-billion dollar fraud at a state-run lender, the collapse of a major infrastructure lender, bad loan issues at state-run banks and a liquidity squeeze that has hit shadow lenders.
The Reserve Bank of India last week moved to take charge of PMC, one of India's top five co-operative lenders with more than nine lakh depositors, and suspended Joy Thomas and the bank's board after uncovering lending irregularities. More than two dozen co-operative banks are now under RBI administration, but PMC Bank - with deposits of Rs. 116.2 billion as of March 31 - is by far the largest.