PMC Bank has over 6,500 crore ex­po­sure to HDIL: Ex-MD Thomas

The Times of India (New Delhi edition) - - Times Global -

Mum­bai: Sus­pend­edMDof the cri­sis-hit Pun­jab and Ma­ha­rash­tra Co­op­er­a­tive Bank (PMC) Joy Thomas has re­port­edly ad­mit­ted to the RBI that the bank’s ac­tual ex­po­sure to the bank­rupt HDIL is over Rs 6,500 crore—four times the reg­u­la­tory cap or 73% of its en­tire as­sets of Rs 8,880 crore.

The ad­mis­sion came af­ter a board mem­ber leaked the ac­tual bal­ance sheet de­tails to the RBI, a source in know of the de­tails said. Last week, Thomas held a press con­fer­ence in which he claimed the HDIL group owed the bank Rs 2,500 crore, which was a 31% ex­po­sure.

HDIL is in the bank­ruptcy court af­ter be­ing hit by a se­vere cash crunch fol­low­ing the fail­ure of some of its key pro­jects in the city. While HDIL did not re­ply to a de­tailed e-mail sent by PTI on the is­sue, the bank, Thomas and its chair­man Waryam Singh could not be reached for com­ment im­me­di­ately.

The source told PTI that non-dis­clo­sure of the ac­tual HDIL sta­tus (NPA since the past two-three years) and the quan­tum of the ex­po­sure to the group was leaked by one of the PMC board mem­bers him­self to the cen­tral bank, forc­ing Thomas to con­fess the mis­re­port­ing. Ac­cord­ing to the source, Thomas wrote a four-and-a-half page de­tailed let­ter to the reg­u­la­tor giv­ing de­tails of how he, along with six key peo­ple who in­clude a few board mem­bers, in­clud­ing Waryam Singh and one or two se­nior bank of­fi­cials, were sanc­tion­ing loans to the HDIL Group.

The source fur­ther said Thomas has also con­fessed that most of the board mem­bers were in the dark about th­ese loans.

Waryam Singh was on the board of HDIL for nine years be­tween 2006 and 2015 and had held1.91% stake in the com­pany dur­ing this pe­riod. He ceased to be a non-ex­ec­u­tive di­rec­tor of the com­pany in March 2015. Be­fore he ex­ited the HDIL board, Singh had sold his en­tire stake in the com­pany.

“The whistle­blower board mem­ber ap­proached the reg­u­la­tor and pro­vided in­for­ma­tion about fi­nan­cial ir­reg­u­lar­i­ties and the real es­tate com­pany’s loans not be­ing clas­si­fied as non­per­form­ing loans from last twothree years, de­spite de­faults on re­pay­ments,” the source told PTI. “This forced Thomas to go to the RBI. In a four-and-a-half page let­ter, he con­fessed the wrong­do­ings and ev­er­green­ing of some other key ac­counts,” he added. The loans were sanc­tioned to the realty de­vel­oper since 2008, the source said.

As per reg­u­la­tions, sin­gle en­tity ex­po­sure limit for banks is 15% of their cap­i­tal fund. For group com­pa­nies, the ex­po­sure limit is 20%. Thus, PMC’s ex­po­sure to HDIL is al­most four times what RBI man­dates.

Though the RBI is still in­spect­ing the bank’s bal­ancesheet, if the NPA num­bers turn out to be as per Thomas’ con­fes­sion, it will be the high­est in the bank­ing in­dus­try so far.

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