Published 16:12 IST, April 17th 2020
PMC Bank crisis: ED Court denies bail to HDIL promoter Rakesh Wadhawan amid COVID-19
Amid the Coronavirus pandemic, HDIL promoter Rakesh Wadhawan's bail in connection to the PMC Bank fraud has been denied by a special court in Mumbai on Friday
Amid the Coronavirus pandemic, HDIL promoter Rakesh Wadhawan's bail in connection to the PMC Bank fraud has been denied by a special court in Mumbai on Friday. Wadhawan had sought bail on medical grounds citing the Coronavirus. Wadhawan and his son Sarang - who were granted bail by a special court on March 30, but the order was delayed by the court for 8 weeks as the Economic Offence Wing (EOW) intervened.
Kapil & Dheeraj Wadhawan break lockdown
Rakesh Wadhawan's nephews Kapil and Dheeraj Wadhawan - promotors of DHFL, who are embroiled in the Yes Bank scam, recently broke lockdown to travel from Mumbai to Mahabaleshwar. The brothers who had recently skipped ED summons citing Coronavirus had travelled to Mahabaleshwar along with 20 family members after receiving a clean-chit from the Special Principal Secretary of the Maharashtra Home Minister. While the state government has issued a probe into the violation, all 23 Wadhawans have been quarantined.
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. The Maharashtra government is mulling merging scam-hit bank PMC bank with Maharashtra State Co-operative (MSC) Bank and the RBI is yet to announce any scheme to revive the state-run bank.
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. Six depositors' deaths have occurred due to insufficient cash since then. 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 Central government has sought to improve the situation by introducing the Banking Regulation (Amendment) Bill, 2020 to strengthen cooperative banks by increasing professionalism, enabling access to capital, improving governance.
Updated 16:12 IST, April 17th 2020