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PMC : Punjab and Maharashtra Co-operative
• PMC Bank, is a multi-state co-operative bank that began
operations in 1983.
• It has 137 branches spread over half a dozen states of India and
nearly 100 branches are in Maharashtra.
• It is regulated by the Reserve Bank of India and registered under
the Cooperative Societies Act.
• It also has branches in Karnataka, Goa, Delhi, Madhya Pradesh
and Gujarat. It is one of the profitable co-operative banks in India
and had earned a total revenue of ₹1,297 crore (US$182 million)
and profits of ₹99.69 crore (US$14 million) in the financial year
What was the
scam ?
• Huge loans granted to Housing Development
and infrastructure ltd. And its entities by mana-
-gement of the PMC bank.
• The scam is related to transfer of 70% of the
total credit facilities to HDIL and associated
• Fraud was amounted to Rs. 4,335.43cr.
• Because of scam NPA of the directly grown to
the 73%
• Since the bank was growing, the statutory auditors were checking only the
incremental advances and not the entire operations in all the accounts.
They scrutinised the accounts which were shown the bank.
• The stressed legacy accounts belonging to this group (HDIL) were
replaced with dummy accounts to match the outstanding balances in the
balance sheet. As the loans were mentioned as loans against deposits and
were of lower amounts, they were never checked by the RBI.
• 21,049 bank accounts were opened by bogus names to conceal 44 loan
What was the
scam ?
• The bank's software was also tampered to conceal these loan
• This bank fraud case is busted by a bunch of women employees
of the credit department of the PMC bank.
• The RBI also put sanctions on the withdrawal of money from the
bank to just Rs1,000 per customer for the next six months,
sending the small account holders into tizzy. The limit was raised
to Rs. 10,000 but angry customers have continued to protest.
• The RBI restricted the activities of the PMC Bank for six
months and asked it not to grant or renew any loans and
advances, make any investment or incur any liability, including
borrowing of funds and acceptance of fresh deposits
• After the scam was unearthed in the bank, which has deposits of
over Rs 11,000 crore, the Reserve Bank of India appointed an
administrator over it, and capped its withdrawals at Rs 40,000
per account for six months.
• Over five PMC bank account holders passed away due to
reasons including heart attack, suicide, etc.
In 1986-87 - PMC Bank’s relationship with HDIL started

In 2004 - HDIL deposited more than Rs100 crore to

help the bank tide over the liquidity
In 2007 - HDIL became a listed company, it clear-
-ed all the dues of PMC and moved on to other banks
In 2011-13 - HDIL suffered a series off set backs as their projects and
started facing liquidity crunch and started defaulting on “all dues
of all banks”.
In 2019 - 70% loss of credit facilities of PMC to HDIL

• With huge outstanding loan amounts classifying as NPA, profitability of the

bank would have been affected. It continued to report all accounts as
standard accounts.
• Accounts not performing well were not brought to the notice of the notice
of the Board. The subsequent overdues of various loans were also not
reported to the Board.