India’s fraud-hit PMC Bank has approached other banks over a imaginable merger even as its efforts to recuperate funds from a big borrower have been disrupted by the coronavirus pandemic, the bank’s administrator said in a court filing seen by Reuters.
Authorities started investigating Punjab and Maharashtra Co-operative Bank (PMC) for fraud final year and the Reserve Bank of India (RBI) took keep an eye on of it after detecting financial irregularities. Thousands of PMC depositors have been unable to access their deposits for a year as the RBI has capped withdrawals at 100,000 rupees ($1,359).
PMC has “tried to engage with the major banks of the country to request for a merger”, the bank’s administrator said in a Sept 10 filing at the Delhi High Court, without identifying the banks or giving other details.
The bulk of PMC’s loan book used to be found to be disbursed to one Indian real estate company, HDIL, and an RBI-appointed administrator, Jai Bhagwan Bhoria, has been trying to recuperate the dues in a tender to rescue the lender. Authorities have been investigating officials of both PMC and HDIL.
HDIL and its associates owe 69.81 billion rupees ($949 million) to PMC, but at 11.6 billion rupees ($157.56 million), the realisable value of its securities used to be “grossly inadequate”, Bhoria said in the filing of the case brought forward by two aggrieved PMC depositors.
Other valid processes to sell sure securities have also been hit as courts have not been fully operational all the way through the novel coronavirus pandemic, the filing said.
Bhoria and the RBI did not immediately respond to a request for remark. HDIL, which has denied any wrongdoing, also did not respond.
Set up in 1984, PMC is a regional co-operative lender with 137 branches across six states in India, and its sudden downfall in late September 2019, has left thousands of its depositors struggling.
In his filing, Bhoria said a push to sell an HDIL yacht had also been hit as it used to be anchored in Sri Lanka and interested bidders had not been ready to examine it because of Covid-19 trip curbs.
One by one, two of HDIL’s aircraft could not be auctioned rapidly as the Mumbai International Airport – where they have got been parked – used to be closed to visitors, the filing said.