Summary

Punjab & Maharashtra Co-operative Bank Limited (PMC), is a multi-state co-operative bank that

began operations in 1983.It has 137 branches spread over half a dozen states of India and nearly 100
branches are in Maharashtra. It is regulated by the Reserve Bank of India and registered under the
Cooperative Societies Act. It is one of the profitable co-operative banks in India and had earned
a total revenue of ₹1,297 crore (US$182 million) and profits of ₹99.69
crore (US$14 million) in the financial year 2019. The crisis at PMC Bank first came to light
on September 24, 2019, the day the Reserve Bank of India (RBI) placed curbs on the
activities of the Mumbai-based bank for six months.

On 23 September 2019, the RBI imposed operational restrictions on PMC Bank for

six months. Due to this, the bank account holders are not allowed to withdraw more than
₹1,000 from their accounts during this period of restrictions.  On 26 September the
restrictions have been eased and a total of Rs 10000 could be withdrawn by customers . Of
the overall loan book of 8300 crore The court also said that the assets of HDIL and its
promoters Rakesh Wadhawan and Sarang Wadhawan must be sold at the earliest in the
interest of the PMC Bank and its depositors. PMC bank loans to HDIL stood at Rs.6226
crore, about 73% of total loans of the bank.To solve this High court asked HDIL and its
promoters assests should sold and pay to interests of depositors.
 Findings

This case is based on pledging The pledge is a type of security interest.Punjab

&Maharastra had done a illegal pledging.The main findings of this case is as
follows

 PMC is one of the profitable co-operative banks in India and had earned a total
revenue of ₹1,297 crore (US$182 million) and profits of ₹99.69
crore (US$14 million) in the financial year 2019.[1]
 The crisis at PMC Bank first came to light on September 24, 2019,
 On 23 September 2019, the RBI imposed operational restrictions on PMC Bank for six
months. Due to this, the bank account holders are not allowed to withdraw more than
₹1,000
 It also stated that the company had been violating the RBI rules for 5-6 years now.

 Of the overall loan book of 8300 crores, PMC bank loans to HDIL stood at Rs.6226
crore, about 73% of total loans of the bank.
 The Bombay high court said that the assests of HDIL and its promoters
should be used for repayment of interests of depositors
 The encumbered assets are valued at Rs 11,000 crores.
