What is a PMC Bank scam after all, which the government ignored?

The Indian banking system is passing through difficult times. The Non-Performing Assets (NPA) in the banking sector is around 8 lakh crores. In this difficult time, a scam case has come to light in Punjab and Maharashtra Cooperative (PMC) Bank. Finance Minister Nirmala Sitharaman’s big statement came in the Punjab and Maharashtra Co-operative Bank i.e. the PMC Bank scam case.

Finance Minister Nirmala Sitharaman had said in a press conference in the BJP office that the government has nothing to do with this bank scam. The entire matter is being looked into by the Reserve Bank of India. Nirmala Sitharaman had said that in view of the problems faced by the consumers of PMC Bank, I will talk to the Governor of the Reserve Bank.

Finance Minister Nirmala Sitharaman had said that the Finance Ministry has nothing to do with the PMC Bank scam case as RBI is the regulator. After all, this is the whole matter, on which the government has to clarify. Let us know what this whole matter is and how has it been done?

How has the PMC Bank scam taken place?

A police investigation has found that 21049 fake accounts were opened in this bank, out of which most of the people were either dead or these people had closed their accounts in this bank. These 21049 accounts were not created in the Core Banking System but were presented to RBI as Advance Master Intent Entry. Top officials of PMC Bank had given loans to a company Housing Development and Infrastructure (HDIL) and its subsidiaries, about 70% of the total loan given by PMC Bank. HDIL and its subsidiaries had opened 44 loan accounts to hide the loan amount in which the loan amount was transferred. If I talk about the total amount of bank scams, then it is said to be around Rs 4,355 crore.

This bank scam has been exposed by a group of women employees of the credit department of PMC Bank. These employees told RBI that they were aware of these fake letters.

Read More: Who is Mehul Choksi & why are we talking about him?

How does this matter come into the limelight?

This matter came to light when HDIL could not repay the loan on time and the NPA of the bank reached up to 70%. Account-holders started facing problems in getting their deposited money. The news of non-receipt of money from the bank spread like a fire and the customers of PMC Bank reached PMC Bank to withdraw their hard-earned money, but they were refused to give their deposited money and the withdrawal limit was set by the bank. Keep in mind that before this scam, Vijay Mallya’s case, Nirav Modi,’s and Mehul Choksi’s cases have already weakened the banking system in the country.

PMC is one of the top 10 co-operative banks in the country with deposits of more than Rs 11,600 crore but despite this, the depositors of PMC are not able to withdraw money from their bank as there are various restrictions in view of the condition of the bank.  The administrator of the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank received 1,229 applications for withdrawal of deposits specifically for the treatment of Covid-19 illness.

These applications were received from mid-April 2020 when the RBI allowed withdrawals up to Rs 5 lakh for treatment of critical illness on hardship grounds including Covid-19. The Bank has been under RBI directions for over 20 months now and depositors, especially senior citizens, have been finding it difficult to make ends meet. According to the report by The logical Indian, an Ex-Jet Airways employee dies of a heart attack hours after attending the protest, with 90 lakh stuck in PMC Bank.

According to another report by Mumbai Mirror, A 45-year-old woman from Mulund died by suicide on July 1, 2020. Her family has claimed that she had been under severe depression after losing all their savings in the PMC bank scam.

According to another report by Newsclick in 2020, 50 PMC Bank depositors died of financial stress in the past 10 months.

Many depositors have died due to prolonged illness because they have no money for the treatment. Their money has been deposited in the bank. The depositors can only withdraw up to 1 lakh as per the directions by the RBI. Thousands of depositors are worried and hoping for this to end.

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