PMC Bank scam: ED attaches HDIL promoter Rakesh Wadhawan's 3 hotels worth Rs 100 cr

Cracking down on the PMC Bank fraud accused Rakesh and Sarang Wadhawan, the Enforcement Directorate (ED) on Friday, attached three hotels owned by Rakesh Wadhawan in connection to the case. As per the press release, three Delhi-based hotels - Hotel Conclave Boutique, Hotel Conclave Executive, Hotel Conclave Comfort (FAB Hotels) owned by Wadhawan and others amounting to Rs 100 crores, have been attached. Currently, Wadhawan along with Sarang is in jail after being denied bail in the case, by a Mumbai court inspite of being infected by Coronavirus (COVID-19).

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ED attaches Wadhawan's Rs 100 cr assets 

The ED investigation has revealed that proceed worth Rs 247 crores were obtained fraudulently by the Hotel owners  - Libra Realtors & Dewan Realtors by PMC Bank in the guise of loans. These loans are part of Rs 6117 crores owed by HDIL to PMC Bank. Apart from PMC Bank fraud, Sarang Wadhawan has also been arrested by Mumbai police's Economic Offences Wing in connection with a Rs 1,034-crore scam in the redevelopment of the Goregaon Patra Chawl redevelopment project.

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PMC Bank Scam

On September 21, the RBI took control of the government-run Punjab and Maharashtra Cooperative (PMC) Bank bank for six-months capping withdrawals at ₹1,000 per account and disallowing the bank to make any fresh loans for six months. Amid several depositors protesting in front of the government and the RBI, the withdrawal limit has been increased to Rs. 40,000. Moreover, the Supreme Court has also stayed the Bombay High Court order directing sale of bankrupt HDIL to ensure repayment of dues and refused to the RBI-sanctioned limits on withdrawal. RBI has extended the moratorium till December  2020 limiting withdrawals to Rs 1 lakh.

After the takeover, PMC Bank had admitted that one large account-Housing Development and Infrastructure Ltd (HDIL) was the sole reason for the present crisis. Following this, the HDIL directors Sarang Wadhawan and Rakesh Kumar Wadhawan were arrested by the Mumbai Police's Economic Offences Wing and the ED in connection with a fraud of over Rs 4,355 crores. PMC Bank officials gave loans to HDIL between the year 2008 and August 2019 despite not paying the previous loans. Seven depositors' deaths have occurred due to insufficient cash since then. 

RBI extends moratorium on PMC Bank till December 22; withdrawal limit capped at Rs 1 lakh

PMC Bank, which had Rs. 11,500 crore deposited in its 137 branches, has already depleted to Rs 200 crores as Tax officials have asked to pay TDS. Meanwhile, the Lok Sabha has passed an amendment to the Banking Regulation Act to bring cooperative banks under the supervision of the RBI. The Banking Regulation (Amendment) Bill, 2020 aims to strengthen cooperative banks by increasing professionalism, enabling access to capital, improving governance - after the PMC Bank fraud. Rakesh Wadhawan's nephews Kapil and Dheeraj Wadhawan - promotors of DHFL, are embroiled in the Yes Bank scam. 

Lok Sabha passes bill to bring cooperative banks under RBI's supervision