PMC Bank: Recasting balance sheet to present true picture

PMC Bank’s administrator JB Bhoria and members of the advisory committee of the bank met RBI top brass including Governor Shaktikanta Das, Deputy Governor and other officials on Wednesday to discuss the progress of the resolution.

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While the HDIL exposure — which is almost 73 per cent of the bank’s advances — turned into NPA, the bank management shielded this huge exposure from the RBI’s scrutiny.

Crisis-ridden Punjab and Maharashtra Co-operative (PMC) Bank on Wednesday said it would expedite the processes of assessment of the realisability of the securities available with the bank, forensic audit and recasting of the balance sheet at the earliest.

PMC Bank’s administrator JB Bhoria and members of the advisory committee of the bank met RBI top brass including Governor Shaktikanta Das, Deputy Governor and other officials on Wednesday to discuss the progress of the resolution. “It was assured that the bank will make all efforts to safeguard the interests of depositors and other stakeholders,” said Bhoria, who was appointed as the administrator by the RBI last month.

The bank, which has a deposit base of Rs over Rs 11,000 crore, said it’s is in the process of recasting its balance sheet to present a “true and fair picture”, according Bhoria. The bank management led by Bhoria apprised Governor Das of the position of the bank after relaxation of the withdrawal limits to Rs 40,000. “It was informed that the bank would expedite the processes of assessment of the realisability of the securities available with the bank and the forensic audit presently underway,” PMC Bank said in a statement.

The meeting with senior officials of the central bank came after police authorities confirmed the death of one more depositor. Over three weeks after the RBI moved against PMC Bank for various irregularities, and imposed a curb on withdrawals, three of the cooperative bank’s account-holders, including a 51-year-old who had lost his job with the defunct Jet Airways in April, died over the last 24 hours in Mumbai. Two of the deaths have been attributed to heart attacks with families and friends claiming that they were under “severe stress”. The third death was that of a 39-year-old doctor, who was “suffering from depression” and committed suicide.

The bank, which is reported to have given over Rs 6,200 crore in loans to realty firm HDIL of the total loan assets of over Rs 8,300 crore, will be recasting the balance sheet “at the earliest so as to arrive at the true and fair picture of its accounts,” it said.

The RBI on Monday increased the cash withdrawal limit to Rs 40,000 per account from Rs 25,000 earlier. “With the above relaxation, about 77 per cent of the depositors of the bank will be able to withdraw their entire account balance,” the RBI said.

While the HDIL exposure — which is almost 73 per cent of the bank’s advances — turned into NPA, the bank management shielded this huge exposure from the RBI’s scrutiny.