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