Congress Demands FIR Against PMC Directors, Calls Fraud A Systemic Failure

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Congress spokesperson Prof. Gourav Vallabh said the latest case of the PMC bank is pointer towards deeper malaise and the systemic failure of the RBI.

Abdul Bari Masoud | Caravan Daily

NEW DELHI — Congress Party on Friday said that bank frauds and financial irregularities are rising steadily in the country since BJP government came to power. Congress spokesperson Prof. Gourav Vallabh said the latest case of the PMC bank is pointer towards deeper malaise and the systemic failure of the RBI.

Speaking at a press conference at Congress Party’s headquarters here, Prof Gourav Vallabh demanded that FIR must be registered against the Punjab and Maharashtra Cooperative Bank Directors including Rajneet Singh, son of BJP MLA before they run away like Nirav Modi and Mehul Choksi to ‘safe foreign’ locations.

Terming the PMC fraud as the “systemic failure” rather than an Individual Bank failure the party said the country lost Rs 71, 543 Cr in bank frauds in the last financial year 2018-19, which was just 41,167 Cr a year back. It also warned that in the PMC bank more than Rs. 11000 Cr of depositors’ money is in danger of being wiped out.

As many as 2480 cases of financial frauds resulting in Rs 32000 Cr loses to public money through public sector banks have been registered in the first quarter of the current financial year, he added.

 Pointing towards the alleged involvements of members from ruling BJP, Prof Vallabh said a  large number of Directors on the Board of the Bank have close proximity to BJP.

“One of them Sardar Ranjit is son of Shri Tara Singh, 4 term MLA from Mulund. The Bank directors have not indicated anything untoward is the RBI reaction based on this angle?”

It’s being alleged that flouting the norms set by RBI, bank was granting loans to defaulters in spite of their inability to pay back the loan, thus incurring huge NPA which was mysteriously under reported in the accounts, he said.

Why were companies like HDIL who were defaulting on 2500 Cr loan was being extended 96 Cr as personal loan, he asked.

Congress leader questioned the role of the RBI stating that its action put scores of depositors in the lurch and their hard-earned money is now under threat. Will RBI ensure the safety of the money deposited by small and medium investors in the bank, he asked.

Congress termed the restrictions on the withdrawal of money from the said bank as specific demonetization for seven states where PMC branches are spread.

“RBI initially restricted withdrawals to Rs.1000/- per depositor over a period of 6 months and then increased the same to Rs.10000/-. This seems to suggest that RBI is clueless as to what the real issue is?” Congress leader said.

He asked whether RBI would take full accountability for the failure of the Bank as well as its likely cascading effect on the Banking system in the Country?

According to RBI data there are 76 Scheduled Co-operative Banks operating in India, among them are 22 State Scheduled banks and 54 Scheduled Co-operative banks. This is much higher than the total number of Nationalised and Private Banks and hence these are forming part of a significant portion of the Country’s Financial System. Any failure will automatically hit the overall sentiments of the Financial Services Industry and hence any failure is to be treated as a systemic failure as these tend to have a cascading effect on the entire financial structure of the country.

PMC bank holds 11,000 Cr rupees of depositors spreading in seven states including Rajasthan, Gujarat, Goa, Punjab, Maharashtra, and Madhya Pradesh.

Congress spokesperson, who is an economist, pointed out that the PMC Bank has reported robust results for the FY 2018-19 and in the same year reported net profit is about Rs 100 Crores.

“If this amount is available in RBI account, why the depositors are restricted to withdraw their own money”. He asked.

When asked whether Congress terms it’s another scam of the ruling BJP, Prof Vallabh averred that the prima facie it has all such things saying that even the former BJP MP Kirit Somaiya also filed a complaint with the police’s Economic Offences Wing (EOW) against top management and senior officials of the bank including Rajneet Singh who is the director of PMC bank for the past 13 years. It is reported that Rajneet is seeking BJP ticket to contest forthcoming Maharashtra assembly election.

Prof Vallabh said Congress demands that the withdrawal limit must be removed and customers must be allowed to withdraw any amount of their money held in deposits.

During the press conference, Congress leader also criticised the rise in prices of onions in the country. Quoting the data of National Horticulture Board, he said it reflects that by the hike in prices of onion middlemen are earning high margins and not the farmers.

On being asked about the US President Donald Trump offer of mediation on the Kashmir problem again, Congress leader avoided to speak on the issue saying let the Prime Minister’s visit be complete, party would react on it after that.

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