HDIL's one-time settlement offer of Rs 96.5 crore, drawn on PMC Bank, was accepted by Bank of India against dues of Rs 522.3 crore.
The 36th annual general meeting of Punjab and Maharashtra Cooperative Bank (PMC Bank) that was scheduled to be held on September 28 in Mumbai has been called off.
The bank’s Managing Director Joy Thomas notified the development to stakeholders late on September 25, citing restrictions by the Reserve Bank of India (RBI).
"I, Mr. Joy Thomas, MD, hereby inform you that as your PMC Bank has been put under regulatory restriction under the Section 35A of B.R Act by RBI for a period of six months, the Board has been superseded and Administrator has been appointed. Therefore, the 36th annual general meeting of the bank proposed to be held on Saturday, 28th September…stands cancelled," the notification said.
"They (RBI) have found some irregularities. There is some exposure to HDIL," a senior bank official told Moneycontrol. He said the amount is not very high and that the issue can be resolved. "The inspection is on. We are very much hopeful," the official added.
The exposure includes a bullet payment of Rs 96.5 crore made by HDIL to settle dues with Bank of India after the latter approached National Company Law Tribunal (NCLT) in August.
On August 31, Bank of India acknowledged receiving two pay orders drawn on PMC Bank as a one-time settlement from HDIL against its loans of Rs 522.3 crore.
The payment was accepted by Bank of India, a senior official from the state-owned lender has confirmed to Moneycontrol.
According to HDIL's annual report, the real estate company holds about 1 percent stake in PMC Bank while it also had loans taken against fixed deposits at the interest rate of 13 percent.
As on March 2019, the bank had an exposure of Rs 984.69 crore against real estate, construction business and housing. There were bad loan additions of Rs 303.80 crore in the financial year 2018-19.
PMC bank is one of the 62 banks registered under Multi-State Co-operative Societies Act, 2002. It comes under the purview of Central Registrar due to involvement of more than one state. As per the norms, the Central Registrar can order winding up of the bank on recommendation of the RBI.The multi-state cooperative bank has 137 branches, mostly located in Mumbai. There are 1,814 employees as in March.