PMC Bank Scam: Rakesh And Sarang Wadhawan Remanded To ED Custody

General News

Rakesh and Sarang Wadhawan, the promoters of the Housing and Development Infrastructure Limited (HDIL) were remanded to the ED custody till October 22.

Written By Akhil Oka | Mumbai | Updated On:

Rakesh and Sarang Wadhawan, the promoters of the Housing Development and Infrastructure Limited (HDIL), were remanded to the Enforcement Directorate (ED) custody till October 22. Initially, they were being probed by the Economic Offences Wing of the Mumbai police. The ED is expected to explore the money laundering angle in the Punjab and Maharashtra Co-operative (PMC) bank scam. In the meanwhile, the scam claimed its 4th victim, when a PMC customer passed away as he could not withdraw the money required for his surgery.  

Read: PMC Bank Scam: An Entrepreneur Calls Out "cascading Effect" On Society

What is the scam all about? 

The police registered a First Information Report (FIR) against the top officials of the PMC bank and the promoters of the HDIL. According to the prosecution, the bank continued giving loans to the debt-ridden HDIL from 2008 to 2019 despite the previous loans not being repaid. This caused a loss of nearly Rs.4,355 crore. Several sections of the Indian Penal Code (IPC) such as criminal breach of trust, cheating, and forgery have been invoked against the accused. Besides the promoters of HDIL, the former Managing Director Joy Thomas, ex-Chairman Waryam Singh and former Director Surjit Singh Arora were arrested and sent to police custody. Out of 44 accounts, a total of 10 were linked to HDIL. These included the personal bank accounts of the accused. 

Read: PMC Bank Scam: A Small-time Trader Talks About His Financial Woes

Impact on the customers   

The customers of the PMC bank have been severely affected in the process. While the Reserve Bank of India (RBI) has increased the monthly withdrawal limit per customer to Rs. 40,000 per month after public pressure, it has failed to pacify the people. Hundreds of aggrieved people have staged protests for the last 22 days. Their principal demands are the return of their hard-earned money stuck in the banks and the prosecution of the culprits of the scam. On Saturday, the protesters are set to gherao the RBI office in Mumbai.  

Read: PMC Bank Scam: FM Gets RBI Guv's Assurance- Customers 'top Priority'

RBI governor’s assurance 

Finance Minister Nirmala Sitharaman stated on October 12 that the RBI Governor, Shaktikanta Das, had assured her of keeping the concerns of the PMC customers as his top priority. She mentioned that she had spoken to him about the PMC bank scam. Sitharaman also reiterated her ministry’s commitment to addressing all the problems of the aggrieved customers of the PMC bank. She observed that their grievances were justified.  

Read: Former PMC Bank Director Arrested

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