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PMC BANK
SCAM
Banking Operations
About PMC bank
• Punjab & Maharashtra Co-operative Bank
Limited (PMC) began its operations in 1983.

• 137 branches in India and nearly 100 branches

are in Maharashtra.

• The Bank stands among top 10 co-operative

banks of the country.

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About HDIL
Housing Development & Infrastructure Ltd was incorporated on July 25, 1996 as a private limited company with the name
Housing Development and Improvement India Pvt Ltd.

Housing Development and Infrastructure Limited) is a listed real estate development company in India.

HDIL was ranked as India’s fastest growing real estate company by Construction World-NICMAR in October 2007.

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Overview
Date of detection Before the fraud Amount involved
The RBI got a whiff of the scam In 2004, HDIL deposited more Rs. 6,500 crores worth of loan
on 17th September 2019 when it than Rs 100 crore to help the bank was advanced to 44 HDIL group
received a letter from a whistle- tide over the liquidity crunch. entities (which is 73% of the
blower. bank’s total assets).
After that HDIL started banking
with PMC and more than 60 per
cent transactions of the bank were
from this group. After HDIL
became a listed company in 2007,
it cleared all the dues of PMC and
moved on to other banks.
PMC approached and requested
HDIL to continue banking with it
as it had started impacting the
profitability of the bank. So,
HDIL again started their
operations with PMC bank after
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5-6 months.
How they did it
• The bank had created close to 21,049 dummy accounts, using which it advanced loans amounting to Rs.
6500 crores to 44 HDIL group entities.
• To escape RBI scrutiny, the loans were channelized through these 21,049 accounts to the 44 accounts of
HDIL group. And, they did not disclose the HDIL accounts to the RBI.
• Whenever an RBI inspects or auditor looks at the books of the bank, they conduct a sample check of about
50-100 accounts only.
• Obviously, the 50-100 accounts shown by the PMC bank officials did not contain the undisclosed HDIL
accounts. Also, these accounts were reported as standard accounts (in which there are no defaults) and
irregularities were not brought to the RBI’s notice.
• Due to this ‘camouflaging’ of accounts, the scale of violation (not reporting defaults and classifying as NPA)
based on available records (50-100 accounts) was very low. They were nevertheless flagged but since they
did not affect the bank’s financial health, the bank continued its normal operations without raising eyebrows.
• Most of the employees at the PMC Bank were oblivious to the fraud because they had limited access to the
centralized software of the bank, known as the core banking solution. Changes were made to the rule engine
of the CBS without the knowledge of the employees, and thus the scam remained covered up for more than
half a decade.
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People Involved

Rakesh Waryam Singh

Wadhawan Joy Thomas
Executive chairman, Former MD, PMC bank Former director – HDIL
HDIL Former chairman – PMC bank

Sarang Surjit Singh

Wadhawan Arora
Vice-president and MD, HDIL Former director, PMC bank.

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Campaign for justice

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Follow up
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Thank you

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