Market Guru Anil Singhvi: 3 lessons to be drawn from PMC bank fraud case
Singhvi spelled out the steps that must be taken on an urgent basis. The first step that the government should take is to increase the insurance limit on your savings because in 1993, the limit was fixed at Rs 1 lakh, which is too less, if we take present scenario into consideration.
Against the backdrop of the deaths of three depositors of Punjab & Maharashtra Cooperative (PMC) Bank in the past few days, bank customers need to learn three significant lessons from this scam, according to Market Guru and Zee Business Managing Editor Anil Singhvi.
Singhvi spelled out the steps that must be taken on an urgent basis. The first step that the government should take is to increase the insurance limit on your savings because in 1993, the limit was fixed at Rs 1 lakh, which is too less, if we take present scenario into consideration.
Second step is that Insurance money should be released immediately once any bank faces the crisis situation, Singhvi said. He added that there should not be any waiting period. Like medical insurance, the amount should be released immediately.
As the third step, he posed a question as to who should decide what shall be the insurance limit. On this, he explained, "If I am investing money in any bank, I should decide about insurance of my amount. Or the bank should decide what should be the amount of insurance and accordingly take the premium." The government must not be the deciding authority in such cases, because every penny deposited with a bank must be secure, and this must be ensured, he added.
Meanwhile, the Mumbai Police`s Economic Offences Wing (EOW) has sought an extension of remand for the prime accused and PMC Bank ex-chairman S. Waryam Singh and HDIL Directors. The EOW has stated that Singh played a key role in the fraud and kept the scam suppressed for a long time.
HDIL was the biggest borrower of PMC Bank and defaulted on dues of Rs 4,335.46 crore between 2008-2019. The accused allegedly replaced 44 HDIL loan accounts having huge outstandings with 21,049 fictitious loan accounts without going through the Core Banking Solution, and instead merely addedas entries in the documents submitted for RBI scrutiny.
All this was done with the full knowledge of the bank directors and officials to camouflage the actual position to paint a rosy picture to lure more depositors. Amidst huge protests by PMC Bank depositors outside the Mumbai court, Singh and other accused were sent to judicial custody till October 23.
A petition was filed today in the Supreme Court seeking the quashing of the Reserve Bank of India circular which has restricted the withdrawal, to Rs 40,000 only, by account-holders of the scam-hit PMC Bank.
Meanwhile, facing imminent threat of more properties being attached by the Enforcement Directorate (ED) in the Rs 4,335 crore PMC Bank fraud case, the Housing Development and Infrastructure Limited (HDIL) promoters and directors have written to the probe agency, Mumbai Police and the RBI, to sell the properties at fair market rates to repay the loans taken by the company.
Watch Zee Business Live TV
The ED has registered a case of money laundering against HDIL promoters in the PMC Bank fraud case taking cognisance of the FIR filed in the matter by Mumbai Police`s Economic Offences Wing (EOW).
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.