Letter to BS: PMC Bank didn't disclose exposure for over 6 years

PMC was said to be amongst the better managed co-operative banks. One shudders to think how many such surprises are hidden in other co-operative banks

The fiasco involving Punjab and Maharashtra Co-operative Bank (PMC) has stirred up a hornet’s nest. One bad account, Housing Development & Infrastructure Ltd (HDIL), is said to be the cause of the downfall of the bank. According to reports, the HDIL exposure was not reported for six to seven years. HDIL did not service the loans for three years and yet, it was not reported as non-performing. One-third of the loan portfolio of the bank was being enjoyed by one group. The rule book has laid down norms for maximum exposure to a single entity or group. The bank successfully