The affidavit, filed by Rajlaxmi Sethi, Assistant General Manager, Department of Co-operative Bank Supervision, RBI, states that PMC Bank had submitted fraudulently manipulated data to the central bank for sample checks, but “the sample of accounts picked for inspection did not contain undisclosed HDIL accounts.”
While the HDIL accounts shown by PMC Bank were seen by the RBI inspection team, a majority of them were declared as non-performing assets.
It added that the PMC Bank had also sanctioned mortgage limits to a wholly-owned subsidiary of the HDIL when the bank’s Chairman, the now arrested S. Waryam Singh, was also a director of the company — a clear conflict of interests and violation of the RBI’s Master Circulars to the effect of July 2010 and July 2012.
S. Waryam Singh also chaired a PMC Bank board meeting to approve the mortgage overdraft in which he was interested, again contravening RBI norms.
The RBI inspection team established the links between Waryam Singh and HDIL promoters/directors (now arrested), which could have helped them get credit facilities, and later to pay off one-time settlement of dues with other lenders, the affidavit said.
The scale of violation and the connected lending that was established, based on…