PMC Bank scam and the undeniable BJP connection

Rajneet Singh, BJP member and son of four-time MLA Tara Singh, was on the board of both the bank and HDIL, the bankrupt firm to which PMC Bank has an exposure to the tune of ₹4,355 crore

PMC Bank account holders stressed
PMC Bank account holders stressed

Kumud Das

When people in power start abusing their positions, problems like that in the case of the Mumbai-based urban co-operative bank, Punjab and Maharashtra Co-operative Bank (PMC Bank) are bound to crop up. Sources within PMC Bank say that Rajneet Singh, son of a BJP strongman, was on the board of PMC Bank and that of HDIL, the firm to which the bank has an exposure of ₹4,355 crore. In his capacity as the director of the bank, he had been throwing his weight around and compelling bank officials to do all the wrong things, it is alleged. Interestingly, Singh has been serving as director of the bank for third tenure.

The Reserve Bank of India (RBI) had initially restricted depositors to a withdrawal amount of ₹1,000 over six months and asked the bank not to disburse loans. The withdrawal limited has hence been relaxed to ₹10,000 and stands at ₹25,000 now. But that has hardly seen the panic among depositors subside. The RBI found a host of transactions at the bank which were done in violation of norms and were kept under the wrap to avoid any regulatory gaze.

The former Managing Director of the bank, Joy Thomas, who has been arrested by the Economic Offences Wing (EOW), has admitted that the bank hid information from its books regarding its bad loans to bankrupt real estate company HDIL. He said the breach in exposure limit to the RBI was not reported for about six to seven years.

Thomas also confessed that the loans granted by the bank were not classified as non-performing assets (NPAs) in the bank’s books deliberately so as to avoid RBI scrutiny. Not only that, the bank had even opened 21,000 fake loan accounts in its bid to hide the over-exposure to the realtor in question. This can’t be possible without the officials of the bank working in connivance with the powerful politician who sits on the bank’s board.

Another revelation, which has come to the fore, is that many of the 12 directors of the bank allegedly have links with the BJP which rules Maharashtra and the Centre. Tara Singh, father of Rajneet Singh, is the BJP's four-time MLA from Mulund. Until recently, Tara Singh was bracing to fight the ensuing state Assembly polls for the fifth time. Besides, Rajneet himself is a party member and was also aspiring to get a ticket from Mulund for the forthcoming Assembly polls in case his father was denied the ticket. Rajneet had tried to bag a BJP ticket from Mulund for the 2017 BMC election, but was pipped by Neil Somaiya, son of the then BJP MP, Kirit Somaiya.

However, the BJP has denied the ticket to the father and the son due to the surfacing of the PMC Bank scam. A party functionary conceded that as his and his son’s name cropped up in the PMC Bank scam, the party decided to drop them both.

In a statement to the media, Rajneet Singh has said that he was not involved in the day-to-day activities of the bank and was not aware of any loan disbursal. Sardar Tara Singh has also said that neither his son nor any of the bank directors had anything to do with loan disbursals. "He (Rajneet) is just a director. Loan disbursals are handled at the level of the bank manager," he said. Here lies the clue. “This shows how the politicians use their clouts to get things done and once things surface, they try to wash their hands off,” commented a person who was familiar with the developments at the bank.

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Published: 06 Oct 2019, 10:30 AM