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Panel to assess value of assets mortgaged by PMC borrowers

The bank is currently undergoing a forensic audit the report for which will be finalised by the end of this month. But simultaneously, other assets and mortgages are also being identified by investigation agencies and the banking regulator to get back the bank’s dues.

ET Bureau|
Dec 06, 2019, 07.01 AM IST
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The bank is under an RBI appointed administrator since September 23 when it came to light that its top management had created thousands of fictitious accounts for real estate developer HDIL allowing the bank to keep these loans out of regulatory gaze.
MUMBAI: A co-ordination committee comprising officials from the Reserve Bank of India (RBI), the Enforcement Directorate (ED) and the economic offences wing (EOW) of the Mumbai police is working with professional valuers to assess the realisable value of assets mortgaged by corporate borrowers from the failed Punjab and Maharashtra Co-operative Bank (PMC Bank) with a view to monetising these assets, governor Shaktikanta Das said in a post policy press briefing.

The bank is currently undergoing a forensic audit the report for which will be finalised by the end of this month. But simultaneously, other assets and mortgages are also being identified by investigation agencies and the banking regulator to get back the bank’s dues.

“We have also put in place a co-ordination mechanism between the PMC Bank administrator, EoW, ED and the RBI to monitor these things regularly and take steps for monetisation of these assets after obtaining the permission of the court as required under the law. Once we get the forensic auditor’s report by the end of this month and once we get the final number after doing a proper assessment of the realisable value of the assets that are available then a call will be taken with regard to the further course of action.

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In the meantime and parallelly this co-ordination mechanism will also work on monetising the assets and putting the money into the bank so that it gets back whatever is due to it,” Das said. The bank is under an RBI appointed administrator since September 23 when it came to light that its top management had created thousands of fictitious accounts for real estate developer HDIL allowing the bank to keep these loans out of regulatory gaze. The matter came to the attention of the RBI after a whistle blower wrote a letter to the RBI’s department of co-operative bank supervision (DCBS) alleging falsification in the bank’s book.

The collapse of the bank which was among the top ten co-operative banks in India has also put the focus on the dual regulation of these entities as the RBI does not have full control over these banks. Although RBI regulates co-operative banks from the financial aspects, the management supervision is done by state and central governments.

In other words, RBI can prescribe the best practices to run a bank but cannot make any changes in the bank management unless in an emergency situation.

RBI will also update guidelines on UCBs primarily to relook at the exposure norms for single and group/interconnected borrowers, for these lenders. UCBs with assets above Rs 500 crore have also been asked to report on the RBI’s Central Repository of Information on Large Credits (CRILC), just like their commercial banking counterparts.

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PMC Bank scam: HC sets up panel for sale of HDIL assets

Pawar meets Anurag Thakur to discuss revival of scam-hit PMC Bank

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