State suggests merger of PMC, MSC banks

MUMBAI: TheShivSena-ledcoalition government in the state on Thursday suggested a merger of fraud-hitPunjabandMaharashtra Co-operative Bank (PMC) withMaharashtraStateCo-operative Bank (MSC) to protect the interests of lakhs of depositors.

Jayant Patil, NCP leader and minister, said he had spoken to the chairman of the apex state co-operative bank. “If required, we can write to Reserve Bank of India(RBI)recommendingsuch amerger.Thegovernmentwants to protect the interests of PMC Bankdepositors.TheMSCBank isingoodfinancialhealth, sothis ispossible.Imadethissuggestion to MSC Bank when I met the chairmandaybefore,”saidPatil.

Patil, who had served as the statefinanceministerduringthe Congress-NCP regime, said this process could take one to two months.

A state finance department official, who did not want to be named, said the formal request for merger will have to be made by MSC Bank to RBI. “The state government can weigh in. And, wecanmakearecommendation. The formal request has to be madebyMSCBank,whichwillbe scrutinised and approved by RBI,” he said.

PMCBank,with16lakhdepositors, came under the scanner in SeptemberafterRBIsuperseded its board with an administrator. It had come to light by then that senior bank officials had been fudging accounts to hide bad loans. The bank had granted loans worth over ₹6,700 crore to HousingDevelopmentandInfrastructure Limited (HDIL), over 73%ofitsadvances,whichturned bad as the company went bankrupt.

The bank was placed under restrictionswithaccountholders being allowed to withdraw only ₹1,000initially. Thisamounthas now been increased to ₹50,000.

In2011,MSChadcomeundera similarscannerwhenRBIsuperseded its board of elected members, mostly comprising ruling CongressandNCPpoliticians,by two administrators.

MUMBAI: A special Prevention of Money Laundering Act (PMLA) court on Thursday declared diamantaire Nirav Modi, who is wanted in connection with a $2 billion fraud at Punjab National Bank(PNB),afugitiveeconomic offender (FEO), empowering investigators to start seizing his assets in India, the United Kingdom and United Arab Emirates.

SpecialjudgeforPMLAcases, VCBarde,declaredModianFEO on a plea by the Enforcement Directorate (ED), which investigatesmoneylaunderingoffences.

Under the FEO Act, which came intoforceinAugust2018,aperson can be declared an FEO if a warranthasbeenissuedagainsthim or her for an offence involving ~100croreormore,andhehasleft thecountryandrefusestoreturn to face the law. The court said in its order that it appeared Modi knewoftheduedatesofpayment of his liabilities when he left the country (on January 1, 2018).

“The material on record leads to draw inference that the respondent has left the country under circumstances rendering suspicionsinbehaviourinorder to dodge forthcoming penal consequencesoftheactshehasdone or committed while in India till the year 2017,” it said.

The court will now start hearings on December 10 on a list of Modi’s properties in India and abroad that are sought to be confiscated by the ED.