PMC Bank: Customers file police complaint against chairman, directors for misappropriation of funds

Distraught customers of Punjab and Maharashtra Co-operative Bank (PMC) filed a joint police complaint against the bank's chairman and directors for alleged misappropriation of funds of the depositors. A delegation of account-holders went to Sion police station in central Mumbai and submitted the complaint against officials of the bank, on which the RBI has imposed operational restrictions. The customers stated that at least 14 people were involved in the alleged misappropriation of funds. They also sought an explanation from the management.

Congress leader Sanjay Nirupam had also said on Thursday morning that he would go to the head office of the PMC Bank with a delegation of customers, while BJP leader Kirit Somaiya is heading to the crime branch to file a case against management of the bank.

While I am headed to head office of #PMCBank with customers' delegation, BJP leader Kirit Somaiya is heading to crime branch to file a case against management of bank.

Interestingly the bank is managed by BJP leaders only.

Weldone Kirit. Hope CM @Dev_Fadnavis will support him. pic.twitter.com/yBMwPURJvx

- Sanjay Nirupam (@sanjaynirupam) September 26, 2019

Users have also taken to social media to voice their concerns and ask why the depositors should pay for the bank's actions. Some even said that similar action could be taken on other banks and no one's money is truly safe.

Last month, I'd written about the safety of your bank deposits & how depositor money will get stuck when banks go under.

I'd predicted this.

There WILL be more.

What happened with #pmcbank today is just a trailer.

We're screwed but the PM is busy holidaying & doing his PR. https://t.co/Ie3vOqUjrE

- Saket Gokhale (@SaketGokhale) September 24, 2019

So PMC bank gave HDIL 2500 crores as loan ! Which seems to be NPA

What is the fault of Account holders who has deposited their hard earned money in bank?

Tomorrow, this can happen with any bank

This is eroding faith in banking system which will have very very large impact

- Arun Arora (@Arun2981) September 25, 2019

Following such mentions on social media, RBI issued a statement on Twitter and said that such reports are false. "Reports appearing in some sections of social media about RBI closing down certain commercial banks are false," it tweeted. 

PMC Bank depositors have also written to the RBI to revoke the restrictions made on the lender. The letter states that such a restriction will inflict "great hardship" on the customers.

Our request #pmcbank @PMOIndia @RBI @nsitharaman @RBIgovernor @AmitShah @narendramodi pic.twitter.com/MTSRrkCdew

- Aaryaa (@jogalathwoh) September 24, 2019

PMC Bank MD Joy Thomas stated that while there are divergences in NPAs, RBI's action was too harsh. "RBI could have restricted only the lending," he said.

According to reports, the bank has been put under the restriction after RBI termed PMC Bank's loan to Housing Development and Infrastructure Limited (HDIL) as a "complete loss". The bank had extended a loan of Rs 2,500 crore to the now-bankrupt real estate firm, HDIL, and did not classify the loan as a bad loan despite the firm's default on payments. An investigation in connection with the case is underway and more details are likely to be revealed after that.

Also read: PMC Bank crisis: Rs 2,500-crore loan to HDIL biggest reason behind RBI clampdown, says report

Also read: PMC Bank customers' money safe, RBI action too harsh, says MD Joy Thomas