Days after putting restrictions on Punjab and Maharashtra Co-operative (PMC) Bank, the Reserve Bank of India on Monday superseded the board of the crisis-hit bank. The central bank has appointed Jai Bhagwan Bhoria as the new administrator of the PMC Bank with all the powers of the board.
"The RBI has superseded the board of PMC Bank, Mumbai and Jai Bhagwan Bhoria has been appointed as the administrator of the bank with all the powers of the board," Ministry of Agriculture & Farmers Welfare notified on Monday.
On September 23, the RBI had imposed regulatory restrictions on the PMC Bank for six months. The withdrawal limit for account holders was also kept at Rs 1,000 for six months, which was later raised to Rs 10,000.
In a statement, the apex bank mentioned that the bank was put under regulatory restriction in the interest of depositors. The restriction was required due to major financial irregularities, failure of internal control and wrong reporting of exposures, the bank stated.
Joy Thomas, who has been suspended as the managing director of PMC Bank, has admitted that the bank hid information regarding its bad loans to bankrupt real estate company HDIL. He told the RBI that the bank's actual exposure to the bankrupt HDIL stood at over Rs 6,500 crore - four times the regulatory cap or 73 per cent of its entire assets of Rs 8,880 crore.
Thomas, in a four-and-a-half page letter to RBI, gave details of how he, along with six key people who include a few board members, including chairman Waryam Singh and one or two senior bank officials, were sanctioning loans to the HDIL Group, PTI quoted a source as saying.