Tag: pmc bank

SC refuses to entertain bail plea of Rakesh Wadhawan, asks him to approach HC, BFSI News, ET BFSI

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New Delhi, The Supreme Court Friday refused to entertain the bail plea filed on health grounds by jailed businessman Rakesh Wadhawan, accused of money laundering in the multi-crore rupees Punjab and Maharashtra Co-operative (PMC) Bank fraud case, saying that he has been in hospital more than the jail. A bench comprising Chief Justice N V Ramana and Justices Surya Kant and Hima Kohli permitted senior advocate Mukul Rohatgi, appearing for Wadhawan, to withdraw the bail plea to approach the high court.

Rohatgi referred to the medical condition of the accused and said that he has been in jail for quite some time.

“I see, he has been in hospital more than in jail. Go to the high court,” the bench said prompting Rohatgi to say that it was the high court which refused the bail.

“File after some time. Not now. Alright permitted to withdraw to approach the high court,” the bench said.

The Bombay High Court on October 14 had refused to grant bail to Wadhawan.

Wadhawan, founder of Housing Development Infrastructure Limited (HDIL), was arrested by the Enforcement Directorate in 2019 in the case.

The high court had said that Wadhawan’s submission that he was immediately required to be released on temporary bail on medical grounds, was “not justified”.

It had said that denial of medical bail was in no way a breach of Wadhawan’s fundamental right to life since he had been provided adequate medical treatment by the state prison authorities whenever required.

Wadhawan, who had undergone a surgery for pacemaker implantation, had sought that he be released on bail so that he can seek discharge from the civic-run KEM Hospital in the city, where he is recuperating while in judicial custody, and shift to a private hospital while out on bail.

He had said in his plea that he suffered from severe comorbidities, that his immune system had been compromised after having contracted COVID-19 recently, and that he was susceptible to contracting infections and ailments while at the civic hospital due to the heavy footfall the hospital received.

He had also said that the KEM Hospital did not have an ICU facility specifically meant for those suffering from cardiac issues.

The fraud at PMC Bank came to light in September 2019 after the Reserve Bank of India discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt Housing Development and Infrastructure Limited (HDIL).

According to RBI, the PMC bank masked 44 problematic loan accounts, including those of HDIL, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

Mumbai Police’s Economic Offences Wing and the ED had registered offences against senior bank officials and HDIL promoters.



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PMC Bank depositors to weigh legal options if scheme of amalgamation not modified

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Depositors of the scam-tainted Punjab and Maharashtra Co-operative (PMC) Bank will weigh legal options if the scheme of amalgamation of their bank with Unity Small Finance Bank (Unity SFB) does not incorporate a favourable deposit withdrawal schedule and interest payment on their deposits.

The ‘draft scheme of amalgamation’, prepared by the Reserve Bank of India (RBI), has proposed a long-drawn out deposit withdrawal schedule extending over a 10-year period for PMC Bank depositors (with over ₹5 lakh balance).

No further interest will be payable on the interest-bearing deposits of transferor (PMC) bank for a period of five years from the appointed date (the date when PMC Bank will stand transferred to, and vest in Unity SFB/ transferee bank).

Interest at the rate of 2.75 per cent per annum will be paid on the retail deposits of PMC Bank which remain outstanding after the aforementioned five year period.

Depositors with balances up to ₹5 lakh will be paid by Unity SFB from the support it will receive from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as part of the amalgamation process.

Chander Purswani, President, PMC Depositors Forum, observed that depositors may be left with no option but to move the Court if the final scheme of amalgamation does not incorporate clauses relating to reduction in time period (to, say, five years) for withdrawal of money and payment of interest (at least savings bank deposit rate) on their deposits with Unity SFB.

Highlighting the plight of some of the senior citizens among PMC Bank depositors, he said they have been reduced to hand-to-mouth existence during the last two years or so despite having money in the bank to lead a comfortable life.

RBI capped deposit-withdrawal from PMC Bank to ₹1 lakh per depositor for the entire period that it is under Directions. What this means is that depositors had to make do with just about ₹3,846 a month for the last 26 months. The bank was placed under Directions in September 2019.

Purswani opined that RBI should allow individual depositors to withdraw 20-25 per cent of the balance in their deposits each year.

Scheme not in depositors interest: Association

Meanwhile, the PMC Bank Depositors Association, in a letter to the RBI, said the scheme of amalgamation, in the current form, is not in the interest of the depositors and is akin to shooting them not in the foot but point blank through the head.

The Association emphasised that depositors should get immediate access to their money at least to the extent of liquid assets with PMC Bank.

The balance money could be released within a reasonable period of 6 to 9 months extending to a maximum of 24 months in a regular phase-wise payout as all the money is currently available with PMC Bank.

Referring to PMC Bank’s current balance sheet, the assets available and the support from DICGC for the amalgamation process, the Association underscored that this makes it possible to pay all the retail depositors in full without even touching a rupee brought in by the new Unity SFB dispensation.

PMC Bank depositors insist they be treated on par with the new depositors of Unity SFB – receive prevailing rate of interest from day 1 – and get access to all their money immediately.

If the aforementioned conditions are satisfied, the Association said PMC depositors will ensure that Unity SFB flourishes.

As at March-end 2021, PMC Bank had deposits aggregating ₹10,535 crore. Of this, about 70 per cent are retail deposits and the rest are institutional deposits, including other urban co-operative banks (216) and co-operative societies (1,750). Reserves and surplus position was negative at ₹3,542 crore.

The bank had investments and advances aggregating ₹2,350 crore and ₹4,123 crore, respectively. The overdue interest recoverable (non-performing assets) stood at ₹5,502 crore.

PMC Bank got into trouble in 2019 as its high exposure to real estate company HDIL turned non-performing. The central bank has red-flagged the fraud/ financial irregularities in the bank and manipulation of its books of accounts.

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Depositors of PMC Bank to get pre-Covid interest rate, BFSI News, ET BFSI

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MUMBAI: Retail deposits at Punjab & Maharashtra Cooperative (PMC) Bank will continue to earn the higher interest rates offered by the bank at the time of the moratorium in September 2019 until March 2021. This is despite the fact that all banks have brought down interest rates following the sharp rate cuts by the RBI in the wake of the pandemic.

The high rates for two years will help compensate for the five-year interest holiday from March 2021. Although interest for subsequent years on high value deposits that are locked in will be capped at a return equivalent to the savings bank rate of SBI, the depositors will have an upside. Bankers said that as Unity SFB will be a startup bank with a high capital base, it will have every incentive to offer better terms to depositors and restore their confidence to ensure that thIn terms of the resolution plan, customers with up to Rs 5 lakh will get their money immediately as this would be made available by the Deposit Insurance and Credit Guarantee Corporation. Those with deposits up to Rs 10 lakh will get most of their funds in four years, while those with deposits above Rs 15 lakh will have to wait for 10 years.

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Depositors of 16 stressed cooperative banks to get up to Rs 5 lakh, BFSI News, ET BFSI

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New Delhi, Nov 28 (PTI) Customers of 16 stressed cooperative banks will get up to Rs 5 lakh deposit insurance cover on Monday by Reserve Bank of India’s subsidiary DICGC as part of its mandate under a new law. The Deposit Insurance and Credit Guarantee Corporation (DICGC) had earlier prepared a list of 21 banks but five, including Punjab & Maharashtra Co-Operative Bank (PMC Bank), are out of the list as they are either in merger process or out of the moratorium.

Parliament in August passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 ensuring that account holders get up to Rs 5 lakh within 90 days of the RBI imposing a moratorium on the banks.

Following enactment, the government has notified September 1, 2021 as the date on which the provisions of the Act would come into force. The mandated 90 days from the notified date comes to an end on November 29, 2021.

The depositors of these banks, who have not yet submitted their claims, are advised to contact the respective banks, a public notice from DICGC said.

“The claims should be supported by officially valid documents of identity and written consent to receive the amount lying in credit of their deposit account (willingness declaration) subject to a maximum of Rs 5 lakh along with alternate bank account details into which the said amount may be credited,” it said.

Depositors submitting valid documents, as mentioned above, will be paid by credit to the alternate bank account specified by depositors or on their consent, to their Aadhaar linked bank account, it said.

For the second phase, the last date for submission of documents is December 10, 2021 while date of payment is December 31, 2021, it added.

Besides PMC Bank, depositors of Hindu Co-Op Bank Ltd, Pathankot of Punjab, Rupee Co-Operative Bank Ltd and Needs Of Life Co-Operative Bank Ltd from Maharashtra and Bidar Mahila Urban Co-Op Bank Ltd of Karnataka are out of this.

It is to be noted that the RBI had in June given in-principle approval to a consortium of Centrum Financial Services and fintech startup BharatPe to acquire the stressed PMC Bank.

Clearing decks for the takeover, the RBI in October gave licence for small finance bank to the consortium. Recently, the DICGC said there may be a need to invoke the provisions of Section 18 A (7) (a) of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021.

As per the Section 18 A (7) (a) of the Act, if a stressed bank is under the resolution process, the period for disbursement of Rs 5 lakh can be further extended by 90 days.

Last year, the government increased the insurance cover on deposits by five times to Rs 5 lakh. The enhanced deposit insurance cover of Rs 5 lakh came into effect from February 4, 2020.

Every bank used to pay 10 paise as an insurance premium per Rs 100 of deposit. It was raised to 12 paise per Rs 100 in 2020. It cannot be more than 15 paise at any point in time per Rs 100 deposit.

It is to be noted that the enhanced deposit insurance cover of Rs 5 lakh is effective from February 4, 2020. The increase was done after a gap of 27 years as it has been static since 1993. PTI DP MKJ



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PMC Bank’s institutional depositors may have to wait for Unity IPO to get money back, BFSI News, ET BFSI

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Depositors of PMC Bank are set for an agonising wait of ten years till they get their money back.

The Reserve Bank has come out with a draft scheme for the takeover of the crisis-hit PMC Bank by the Delhi-based Unity Small Finance Bank (USFB).

The draft scheme of amalgamation envisages the takeover of the assets and liabilities of PMC Bank, including deposits, by USFB, thus giving a greater degree of protection for the depositors, the RBI said.

In a statement issued later, USFB said with the draft scheme ’96 per cent of all depositors will get immediate access to their full deposits’.

It said 99 per cent of the retail depositors will be paid in full by the fifth year and 100 per cent of retail depositors to be paid in full by the tenth year.

Retail depositors

According to the scheme deposits up to Rs 5 lakh can be claimed by depositors over a period of three to ten years.

The scheme says that depositors can claim up to Rs 50,000 at the end of three years and further can claim Rs 1 lakh at the end of four years, Rs 3 lakh at the end of five years and Rs 5.50 lakh at the end of 10 years. The RBI had doubled the amount depositors can withdraw from PMC Bank to Rs 1 lakh from Rs 50,000 in June 2020, allowing more than 84% of the depositors to withdraw their entire account balance.

RBI said the above limits are for depositors are over and above the withdrawals already made.

According to this schedule, the entire remaining deposits of PMC Bank depositors will be paid back within 10 years from the date the central government notifies this scheme of amalgamation. Further, the central bank has clarified that interest on these deposits shall not accrue after March 31, 2021, for five years.

PMC Bank's institutional depositors may have to wait for Unity IPO to get money back

“No further interest will be payable on the interest-bearing deposits of transferor bank for a period of five years from the appointed date. Provided further that interest at the rate of 2.75 per cent per annum shall be paid on the retail deposits of the transferor bank (PMC) which shall be remaining outstanding after the said period of five years from the appointed date. This interest will be payable from the date after five years from the appointed date,” RBI said.

Institutional depositors

About 80% of uninsured institutional deposits will be converted into Perpetual Non-Cumulative Preference Shares (PNCPS) of Unity SFB with dividend of one per cent per annum payable annually.

After ten years from the appointed date, Unity SFB may consider additional benefits for PNCPS holders either in the form of providing a step up in coupon rate or a call option, upon receipt of approval from the Reserve Bank.

The remaining 20% of the institutional deposits will be converted into equity warrants of Unity SFB at a price of Re.1 per warrant. These equity warrants will further be converted into equity shares of the Unity SFB at the time of the Initial Public Offer (IPO) when it goes for one.

“In respect of every other liability of the transferor bank (PMC) the transferee bank (Unity) shall pay only the principal amounts, as and when they fall due,to the creditors in terms of the agreements entered between them prior to the appointed date or the terms and conditions agreed upon,” RBI said.

PMC Bank's institutional depositors may have to wait for Unity IPO to get money back

In June, RBI had given an in-principle approval to Unity SFB, a joint venture of Centrum Financial Services and Resilient Innovations Pvt. Ltd which runs payments company BharatPe to take over PMC. Unity started operations as recently as November 1.

PMC Bank had 137 branches and deposits of around Rs 11,600 crore, at the time restrictions were announced.

Employees

The draft also said all the employees of the PMC Bank shall continue in service on the same remuneration and terms and conditions of service for three years from the appointed date.

“The draft scheme provides much needed relief and clarity to over 1,100 PMC Bank employees, who will remain employed and continue uninterrupted service to clients,” USFB said in the statement.

The RBI said, “The transferee bank (USFB) may discontinue the services of the key managerial personnel of the transferor bank after following the due procedure at any time, after the appointed date, as it deems necessary and providing them compensation as per the terms of their employment”.



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RBI details draft amalgamation plan for PMC Bank, BFSI News, ET BFSI

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Mumbai: The Reserve Bank of India (RBI) has detailed a draft scheme for the merger of sick Punjab and Maharashtra Cooperative (PMC) Bank with the newly-formed Unity Small Finance Bank Ltd (USFB), more than two years after PMC was put under restrictions on account of fraud that led to a steep deterioration in the networth of the bank.

According to the scheme, deposits of up to 5 lakh can be claimed by depositors over a period of three to 10 years.

The scheme says depositors can claim up to 50,000 at the end of three years, 1 lakh at the end of four years, 3 lakh at the end of five years and 5.50 lakh at the end 10 years.

It may be recalled that the RBI had doubled the amount depositors can withdraw from PMC Bank to 1 lakh from 50,000 in June 2020, allowing more than 84% of the depositors to withdraw their entire account balance. RBI said the above limits are for depositors over and above the withdrawals already made.

According to this schedule, the entire remaining deposits of PMC Bank depositors will be paid back within 10 years from the date the central government notifies this scheme of amalgamation.

Further, the central bank has clarified that interest on these deposits shall not accrue after March 31, 2021 for five years.

“No further interest will be payable on the interest bearing deposits of transferor bank for a period of five years from the appointed date. Provided further that interest at the rate of 2.75% per annum shall be paid on the retail deposits of the transferor bank (PMC), which shall be remaining outstanding after the said period of five years from the appointed date. This interest will be payable from the date after five years from the appointed date,” RBI said.

According to the scheme, 80% of uninsured institutional deposits will be converted into perpetual non-cumulative preference shares (PNCPS) of Unity SFB with dividend of 1% per annum payable annually.

After 10 years from the appointed date, Unity SFB may consider additional benefits for PNCPS holders either in the form of providing a step-up in coupon rate or a call option, upon receipt of approval from RBI.

The remaining 20% of the institutional deposits will be converted into equity warrants of Unity SFB at a price of `1 per warrant. These equity warrants will further be converted into equity shares of the Unity SFB at the time of the initial public offer when it goes for one.

“In respect of every other liability of the transferor bank (PMC), the transferee bank (Unity) shall pay only the principal amounts, as and when they fall due, to the creditors in terms of the agreements entered between them prior to the appointed date or the terms and conditions agreed upon,” RBI said.

“Our shareholders have committed capital of over `3,000 crore through cash and warrants, which will be utilised to build a strong foundation for the bank, hire the right talent and bring best-in-class technology,” Unity Small Finance Bank said in a statement.

In June, RBI had given an in-principle nod to Unity SFB, a joint venture of Centrum Financial Services and Resilient Innovations that runs BharatPe, to take over PMC.



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PMC Bank’s retail depositors face long wait to get full money, BFSI News, ET BFSI

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MUMBAI: Retail depositors with over Rs 15 lakh in Punjab and Maharashtra Cooperative (PMC) Bank will have to wait for 10 years to get all their money back. The timeline is in terms of a resolution plan drawn up by the RBI, which involves the defunct cooperative lender’s amalgamation with the newly formed Unity Small Finance Bank (SFB).

The resolution of PMC Bank through private investment using the SFB licence route is the first time such an exit option has been adopted for stakeholders in a failed bank.

Institutional depositors, including cooperative housing societies and cooperative credit societies which have deposits in the bank, will end up taking a haircut. The resolution plan envisages 80% of their funds being converted into perpetual non-cumulative preference shares with a dividend of only 1% per annum. After 10 years, the bank can decide if it wants to increase the dividend or repay investors. The remaining 20% of institutional funds will be converted into equity warrants of Unity SFB at Re 1 per warrant. These warrants will be converted into shares whenever Unity SFB floats a public issue. For retail investors, interest at the rate of 2.75% will be paid on deposits that are outstanding after five years from the date of notification of the scheme.

The draft proposals will be finalised and implemented through a government notification after taking into account suggestions and objections up to December 10, 2021. Going by experience, major changes are unlikely under the scheme as there is a huge gap between the assets and liabilities of the bank due to large-scale fraud and there are no other bidders to take over the business.

“Given the financial condition of the PMC Bank, and in the absence of proposals for capital infusion, the bank was not viable on its own. In that event, the only course of action could have been the cancellation of its licence and taking it for liquidation, wherein depositors would have received payment up to the insurance ceiling of Rs 5 lakh,” the RBI said.

Unity SFB, which has been promoted by Centrum and Bharat Pe, said that 96% of all depositors will get immediate access to their deposits and 99% will get paid in full by the 5th year. It added that the scheme saves the bank from liquidation and protects the interest of stakeholders.

“The draft scheme provides much-needed relief and clarity to over 1,100 PMC Bank employees, who will remain employed and continue uninterrupted service to clients,” the statement said. It added that the bank was operationalised in record time after RBI’s approval on October 12, 2021. “Our shareholders have committed capital of over Rs 3,000 crore through cash and warrants which will be used to build a strong foundation for the bank,” the SFB said.



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PMC Bank depositors with over Rs 5 lakh in deposits to get paid over 10 years

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Unity SFB shall have time up to 20 years from the appointed date to repay the amount received from DICGC towards payment to the insured depositors, which can be done in one installment or in several instalments.

The Reserve Bank of India (RBI) on Monday released the draft scheme for the amalgamation of Punjab and Maharashtra Co-operative (PMC) Bank with Unity Small Finance Bank (SFB). The scheme envisages a full payout for depositors with deposits of over Rs 5 lakh over a period of 10 years.

Unity SFB, promoted jointly by Centrum Financial Services and BharatPe owner Resilient Innovation, will have to transfer the amount received from the Deposit Insurance and Credit Guarantee Corporation (DICGC) to all eligible depositors of PMC Bank an amount equal to the balance in their deposit accounts up to Rs 5 lakh, within a 90-day period, as was notified by the DICGC in September.

For depositors who hold more than Rs 5 lakh in deposits, the payout for the additional amount will be made in a staggered manner. Up to Rs 50,000 will be paid over the next two years, up to another Rs 1 lakh after three years, up to Rs 3 lakh after four years, up to Rs 5.5 lakh after five years, and any remaining amount will be paid after 10 years.

After March 31, 2021, no further interest will be payable on the interest-bearing deposits of PMC Bank for a period of five years. In respect of balances in any current account or any other non-interest bearing account, no interest shall be payable to the account holders. Interest will accrue at the rate of 2.75% per annum shall be paid on the retail deposits of PMC Bank, which remain outstanding after the five year-period. This interest will be payable from the date after five years from the appointed date, or the date of notification of the scheme by the government.

As for institutional depositors, 80% of the uninsured deposits outstanding in various accounts to the credit of each institutional depositor of PMC Bank shall be converted into perpetual non-cumulative preference shares (PNCPS) of Unity SFB with a dividend of 1% per annum payable annually. After 10 years from the appointed date, the transferee bank may consider additional benefits for such PNCPS holders either in the form of providing a step up in the coupon rate or a call option, after taking the RBI’s approval.

The remaining 20% of the uninsured institutional deposits will be converted into equity warrants of Unity SFB at a price of one rupee per warrant. These equity warrants will further be converted into shares of Unity SFB at the time of the initial public offer (IPO) of the bank. The price for the conversion will be determined at the lower band of the IPO price.

In respect of every other liability of PMC Bank, Unity SFB shall pay only the principal amounts, as and when they fall due, to the creditors in terms of the agreements entered between them prior to the appointed date or the terms and conditions agreed upon.

Unity SFB shall have time up to 20 years from the appointed date to repay the amount received from DICGC towards payment to the insured depositors, which can be done in one installment or in several instalments. “The transferee bank shall create a reserve account in its books and make periodical transfers to it as may be approved by Reserve Bank, for the purpose of discharging its liability towards DICGC in accordance with the provisions of this Scheme,” the draft said.

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PMC Bank: Proposed scheme of amalgamation could be a test case for RBI

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The proposed amalgamation of the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank with the newly floated Unity Small Finance Bank could be a test case for the Reserve Bank of India (RBI) regarding its approach towards how individual depositors with deposits up to ₹2 crore and those with deposits of ₹2 crore and above can be dealt with when it comes to withdrawal of money.

The Scheme being put together by the central bank is expected to be placed in public domain in a week or so for suggestions and objections from members, depositors and other creditors of transferor bank (PMC Bank) and transferee bank (Unity SFB).

As per Reserve Bank of India (Interest Rate on Deposits) Directions, 2016, a “Bulk Deposit” means a single Rupee term deposit of ₹2 crore and above for Scheduled Commercial Banks (excluding Regional Rural banks) and Small Finance Banks.

So, a deposit of up to ₹2 crore is considered as a “Retail Deposit”.

The question uppermost on individual depositors’ (under the bulk deposit category) mind is whether the central bank will treat retail deposit and individual bulk deposit on an equal footing vis-a-vis withdrawal.

Phased withdrawal

Chander Purswani, President, PMC Depositors’ Forum, said the Scheme should clearly specify the threshold up to which individual deposits can be freely withdrawn and how deposits beyond this threshold can be withdrawn in a phased manner over, say, 3-5 years.

City Co-op Bank wants to emulate PMC Bank for reconstruction

Further, interest accrued on individual depositors’ deposits, be it retail or bulk, should be allowed to be withdrawn in toto.

He underscored that PMC Bank depositors have suffered over the last 26 months amid the Covid-19 pandemic as deposit withdrawal has been capped at ₹1 lakh of the total balance in their account(s) during the entire period that their Bank is under RBI’s Directions.

What this means is that depositors, especially senior citizens (who usually depend on interest earnings to meet monthly expenses), had to make do with only ₹3,846 a month over the last 26 months.

PMC Bank’s resolution could become a template for rescuing other weak UCBs

Purswani assessed that after taking into account deposit withdrawals of up to ₹1 lakh, PMC Bank has about 1.42 lakh depositors with deposits of over ₹1 lakh. Of this, there are about 43,000 depositors, including individuals, trusts, cooperative societies, etc, with deposits of over ₹5 lakh.

DICGC, a wholly-owned subsidiary of RBI, had upped the limit of insurance cover for depositors in the insured banks fivefold to ₹5 lakh per depositor with effect from February 4, 2020.

Individual depositors, including those with large deposits, need an assurance that they can systematically withdraw their money from Unity SFB, the Forum’s chief said.

Limited period incentive

He opined that the Scheme could also incorporate a limited period incentive, whereby PMC Bank depositors can earn higher interest rate over the card rate so that they are encouraged to keep the deposits with Unity SFB.

PMC Bank came to grief as its high exposure to real estate company HDIL turned non-performing.

The central bank red-flagged the fraud/financial irregularities in the bank and manipulation of its books of accounts.

Last month, RBI granted banking licence to Unity SFB, which has been established jointly by the Centrum Financial Services Ltd (CFSL) and Resilient Innovations Private Limited (BharatPe), to carry on SFB business in India.

RBI had accorded “in-principle” approval to CFSL, which is a wholly-owned subsidiary of Centrum Capital Ltd, on June 18, 2021, to set up an SFB.

The “in-principle” approval was in specific pursuance to CFSL’s February 2021 offer in response to PMC Bank’s November 2020 Expression of Interest (EoI) notification.

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RBI to directly access banks’ system to prevent PMC Bank, DHFL type scams, BFSI News, ET BFSI

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The Reserve Bank of India has set up a big data centre that can access data from banks’ systems, according to a report. The data centre will help prevent scams like PMC Bank, where data was masked by using dummy accounts. DHFL too had used a similar method to hide borrower accounts and stress.

The RBI is currently working with commercial banks and plans to extend it to urban cooperative banks.

The RBI plans to deploy more analytical functionalities on data from supervised entities to improve the overall functioning of the sector and improve data sanctity, the report said.

The expanded RBI data centre with new functionalities was to be completed in 2020 but was delayed due to Covid, which has now been completed and testing of system-to-system integration has been done with some banks.

PMC Bank scam

A total of 44 ‘borrowal accounts in the Punjab and Maharashtra Co-operative Bank, belonging to HDIL and its affiliates, had been ‘masked,’ with a view to hide these from the core banking system of the bank, the EOW has learnt.

Due to this, the loan default scam perpetrated in the bank over the years went unnoticed during successive audits.

Though access to the other accounts (saving, current or loan) was available to the employees of the bank as well as auditors, access to the aforesaid 44 accounts was masked by using special encrypted passwords.

The masking was done to hide the huge non-refunded personal loans allotted to HDIL promoters, Rakesh and Sarang Wadhwan. The outstanding borrowals in two personal accounts belonging to Rakesh and Sarang Wadhwan amounted to Rs 2008.62 crore and Rs 137.16 crore, respectively.



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