Mumbai: In an attempt to allay fears of depositors and customers of Punjab & Maharashtra Cooperative Bank (PMC), its suspended managing director Joy Thomas has claimed that the lender holds enough liquidity to meet all liabilities, and every penny of the public is secure.
Asserting that all its loans are fully secured, Thomas stated that one large account - HDIL - was the sole reason for the present crisis that led to the regulatory action on Tuesday when Reserve Bank of India (RBI) superseded its management and placed it under an administrator for the next six months. Despite repeated attempts HDIL could not be reached for comments.
The regulator has also capped cash withdrawal at Rs 1,000 per customer during this period and banned the bank from any fresh lending during this period. Though Thomas did not disclose the exposure to HDIL, which he described as the largest and one of the oldest customers, he said all other accounts were safe and fully-secured.
"All other loans are more than fully-secured and there is no need for any customer to panic," Thomas told PTI in an interview Wednesday evening. "We have enough liquidity and back-up securities for all what we have lent. As a cooperative bank, we never do unsecured lending and our loan coverage ratio has always been 100-110 per cent," Thomas said.
He said the bank has a cash liquidity of around Rs 4,000 crore in the form of statutory liquidity ratio (SLR) and cash reserve ratio (CRR), while its liabilities are around Rs 11,600 crore. One of the reasons for the RBI action is the highly under-reported non-performing assets (NPAs), which according to sources are in high double-digits, while as per its FY19 balance sheet, it stood at a low 2.19 per cent, which though was more than double of 1.05 percent in FY18.
Thomas admitted that the problem rose because of under-reporting of NPAs from the HDIL account. The slum redevelopment company, which has landed in cash crunch, has already gone to the bankruptcy now, has been delaying payments for the past few years.
"The divergence was only on HDIL. There was a difference between what we were reporting and what the actual numbers were. There was a delay on repayment for the last two-three years and we have been under-reporting that," Thomas admitted. He, however, declined to quantify its exposure to HDIL, saying the loan is fully-secured.
Meanwhile, several account holders of the crippled Punjab and Maharashtra Cooperative (PMC) Bank filed a joint police complaint for alleged misappropriation of funds of the customers. A delegation of account-holders went to Sion police station in central Mumbai and submitted the complaint against officials of the bank, on which the RBI has imposed operational restrictions.
The delegation in its complaint alleged that at least 14 people, including the PMC Bank's chairman and all its directors, were involved in misappropriation of funds of the account holders. The complainants have demanded police action in the case.
(With PTI inputs)
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