Mumbai: Did PMC lie to RBI or hide loan defaults?

Updated On: 28 September, 2019 07:21 AM IST | Mumbai | Chetna Sadadekar

Suspended MD of bank says it approached RBI for help to regularise Rs 2,500 cr unclassified loans, but it imposed restrictions instead

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Suspended MD of PMC bank, Joy Thomas speaks to the media on Friday. Pic/ Ashish Raje

Even as customers of Punjab and Maharashtra Co-Operative Bank (PMC) continue to live a nightmare, managing director of the bank, Joy Thomas, who is currently under suspension, faced the media on Friday, accepting that the present situation was a result of PMC's actions. He said the bank had approached the Reserve Bank of India (RBI) on September 19 to seek help to regularise loans worth Rs 2,500 crore unclassified for the past seven years. Following this, the RBI put the bank under restrictions, suspended the board and placed an administrator.

Loan default

Now the question arises whether PMC kept the loan default a secret on purpose or whether they lied about it. Speaking at the press meet, Thomas said the loans weren't classified because highlighting them could have created problems for the bank's business and growth and would have led to chaos among depositors. Despite this, the PMC management claimed the depositors' money was safe as the bank had enough securities and assets.

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