PMC Bank set to file FIR against sacked managing director Joy Thomas

Topics Co-operative Bank | HDIL | RBI

Joy Thomas, former MD, PMC Bank, addressing a press conference in Mumbai on Friday | Photo: Kamlesh D Pednekar
The Reserve Bank of India (RBI)-appointed administrator of Punjab and Maharashtra Co-operative (PMC) Bank plans to file a first information report (FIR) against sacked managing director Joy Thomas on charges of fraud for misrepresenting the bank’s books and hiding bad debts of bankrupt real estate firm Housing Development & Infrastructure (HDIL). The alleged cooking of the books continued for a long time until a key member of the group refused to play along.

PMC Bank’s administrator, J B Bhoria, confirmed that his team was “on the job” in filing the FIR against Thomas.

On Friday, Thomas held a sudden press conference in his “personal capacity” and admitted to malfeasance in hiding the HDIL bad debt. “The loans granted by us were not classified by the bank (as non-performing asset or NPA) during the past six to seven years because we feared that would hamper our growth,” said Thomas.

He claimed that the RBI auditors failed to detect the omission. Rather, the management volunteered to disclose all the facts. Thomas and his team went to the RBI on September 19 and apprised the regulator of the situation and sought time to resolve the issue.

“We sought time for a resolution plan. The executive director of the RBI said he would conduct a normal inspection, as our inspection was also due,” Thomas added.

However, sources said Thomas and his team were forced to spill the beans after a chief manager of a major branch, a key member of the eight-person group involved in the falsification of accounts, “turned a rebel little earlier on that day and gave a letter to the RBI, revealing everything”.

The team then told the RBI that they could not continue with the falsification exercise anymore.

“The situation of the lending book was very, very bad,” said a source.


According to Thomas, PMC Bank’s exposure to HDIL was Rs 2,500 crore. But sources said the exposure would be much higher, and including interest, it could be more than half of the bank’s loan book of Rs 8,383 crore as of March end.

Interestingly, even after Bank of India dragged HDIL to the bankruptcy court, PMC Bank’s management lent money to HDIL. PMC wrote on August 31 two pay-orders totaling Rs 96.5 crore for HDIL promoter Sarang Wadhawan to repay non-convertible debentures of HDIL invested by Bank of India.

The additional loans were given to keep HDIL out of the bankruptcy proceedings, Thomas claimed. PMC Bank feared that once under the hammer, HDIL’s assets would be attached by other lenders as well and PMC Bank would not be in a position to invoke the securities that it had secured against the loans given to the entity.

Thomas said the bank’s board was not aware about the underreporting of NPAs related to HDIL. But the RBI or the administrative team in the bank is unlikely to buy this logic. 


The RBI on Tuesday placed curbs on the activities of Mumbai-based PMC Bank for six months following the revelation of the alleged irregularities. Initially, the regulator had capped the withdrawal by depositors of the bank at Rs 1,000 per account. However, on Thursday, the limit was raised to Rs 10,000.

According to Thomas, it was a “harsh decision” as “we ourselves made the regulator aware of the situation”. “This is not a case of fraud, it is more technical in nature, which we could have resolved in a proper manner without the customers getting affected,” he added.

Thomas claimed that the loans given to HDIL and its group entities were backed by enough securities, mostly land parcels.  

Even as Thomas is suspended, and has no say in the bank affairs, he claimed in the press conference that the RBI may consider increasing the limit of withdrawal per depositor to Rs 1 lakh.  


He also said the bank had enough liquidity to pay the depositors. The bank has 19 per cent SLR (statutory liquidity ratio), 3-4 per cent CRR (cash reserve ratio) and has its own properties, he said.

In the dock
  • RBI-appointed administrator to charge former PMC Bank MD Joy Thomas with fraud 
  • Bank’s HDIL exposure, including interest, could be more than half of its books
  • Thomas says did not disclose bad debts for 6-7 years
  • A senior executive refused to take part in ‘manipulation’ and disclosed everything in a letter to RBI
  • Thomas claims RBI auditors failed to notice irregularities
  • Says board was not aware that HDIL was a bad debt 



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