EOW Chargesheet Makes Big Revelation In Multi-Thousand Crore PMC Bank Scam Case

PMC Bank scam involved deliberate violations of regulations by bank officials. They concealed the actual financial situation of the bank by not declaring multiple accounts as NPAs.

The scam affected many ordinary depositors, and the EOW chargesheet and Grant Thornton's forensic audit report are crucial pieces of evidence in the case.

Source : PTI

The Mumbai Police’s Economic Offences Wing (EOW)chargesheet and the forensic audit report by Grant Thornton have uncovered deep-rooted and meticulously planned fraud in the Punjab and Maharashtra Co-operative (PMC) Bank scam case. According to the documents, bank officials deliberately violated regulations by not declaring multiple accounts as Non-Performing Assets (NPAs) and manipulated records on a large scale to conceal the bank’s actual financial situation.

Renowned Companies’ Accounts Not Declared NPA

The EOW chargesheet reveals that interest payments on several accounts remained overdue for way more than two quarters and were not regularised until March 31, 2019. Despite this, the bank did not declare these accounts as NPAs until an audit by the Reserve Bank of India (RBI) exposed the scam.

For instance:

The account of Abchal Ship Wreckers Limited became NPA on September 4, 1998, but was not reported until October 16, 2019.

Friends Engineering Corporation’s account turned NPA on November 30, 2002, yet it was also hidden until 2019.

Kanwal Corporation’s account became NPA on April 24, 2003, but was concealed till 2019.

Dozens of such accounts remained irregular for years, and the bank management deliberately suppressed their actual status.

Shocking Findings From Grant Thornton Report

The forensic audit report by Grant Thornton revealed that 41 loan accounts granted to HDIL and its associated entities remained overdue for more than 90 days but were not classified as NPAs.

Despite Rs 3,271.84 crore in overdue interest, these amounts were falsely shown in the books until March 2019, whereas as per RBI norms, they should have been reversed. The report also suggested that PMC Bank’s income was artificially inflated, leading to incorrect presentation of profits and other financial metrics over five years.

Overbooking of interest by financial year:

₹61.83 crore in 2012-13

₹374.75 crore in 2014-15

₹780.51 crore in 2017-18

These inflated figures completely masked the bank’s actual financial health.

What Is The PMC Bank Scam?

The PMC (Punjab and Maharashtra Co-operative) Bank scam surfaced in 2019. The bank grossly violated regulatory norms and concealed critical information from its account holders. Following the scam’s exposure, the RBI imposed several restrictions on the bank, including caps on withdrawals. Many ordinary depositors were severely impacted with their life savings stuck in the bank. Subsequently, investigation agencies arrested several key accused.

The EOW chargesheet and Grant Thornton’s forensic audit report are now crucial pieces of evidence that are expected to pave the way for justice in the PMC Bank case.