The document summarizes the collapse of the Punjab and Maharashtra Cooperative (PMC) Bank in India. It describes how the bank's loans to Housing Development and Infrastructure Limited (HDIL) group reached unsustainable levels, accounting for over 70% of PMC's loan book, and how bank officials hid this exposure for over 10 years. When HDIL defaulted on loans of around Rs 6,500 crore, it caused a liquidity crisis at PMC Bank and led to regulatory restrictions on deposit withdrawals. The collapse devastated thousands of depositors and exposed weaknesses in banking regulation.

1. The PMC Bank Collapse
• -A CASE STUDY
Assignment 1,
-December 2019
Trainer: Sana mam
Module:1
Report prepared by:
Asha Rathod Purbiya(B1008160)

2. Introduction
 This bank was established on February 13, 1984 as
a single branch cooperative Bank. Punjab &
Maharashtra Cooperative (PMC) Bank is a
Scheduled Urban Co-operative Bank with its area
of operation in the States of Maharashtra, Gujarat,
Delhi,Goa, Karnataka, Madhya Pradesh and
Andhra Pradesh.Oct 7, 2019


3. History
 The humble beginning of the Bank was done in a
small room at Sion, on February 13, 1984 as a single
branch Bank. In a span of 35 years, the Bank has a
wide network of 137 branches across six states.
The Bank stands among top 10 co-
operative banks of the country.

4. The Collapse
 It was among the top five co-operative lenders in
India, with a loan book of Rs 8,383 crore. However,
this exposure excludes the bank's Rs 6,500-crore
hidden loans to HDIL as of March 2019, which is
facing insolvency proceedings in the NCLT.

5. THE SCAM
 Almost 70% PMCB’s loans (about Rs 6,000 crore)
granted to HDIL.
 Six senior bank officials, 21,049 dummy accounts
and over 10 years of misreporting to execute the
fraud
 HDIL promoters allowed to operate password
protected ‘masked accounts’ through which over
70% of the depositors monies was sanctioned as
untenable loans

6. THE SCAM
 Of the Rs.4,355 CR. Of loans under scanner,
arounds rs.2146 crore transferred to accounts held
by the wadhawans of HDIL.
 An account belonging to Rakesh wadhawan had a
balance of Rs.2,009 CR. On August 31,2019.

7. THE SCAM
 RBI’s intial probe shows PMCB Directors replaced
44 suspicious loan accounts whose individual
balances were low.
 44 borrower accounts allegedly linked to HDIL were
masked by tampering with bank software.

8. Regulation in Response
 RBI on PMC Bank: On Thursday, RBI raised
withdrawal limit for account holders of the PMC
Bank to Rs 25,000 from earlier withdrawal limit of
Rs 10,000.

9. What Depositors Can Learn From The
PMC Crisis
 So, if a bank collapses, you are entitled to an
amount up to Rs. 1 lakh against your account

10. Conclusion
 He says he closed his accounts with various co-
operative banks but decided to continue with PMC
Bank. ... PMC Bank's losses from not declaring
some of the loans given to HDIL as non-performing
assets (NPAs) even after they had turned bad have
been pegged at Rs 4,355 crore

11. Our Observations
 PMC's results in FY19 show no issues with
the bank, with net NPAs of 2.19% ... It is not hard to
imagine, therefore, what his observations would
.... Not only our family, but also our housing society
has Rs 75 lakh with the bank.