Audit uncovers ₹87.5 Cr loan sanctioned but not disbursed – PMC Bank faces scrutiny

Mumbai, Jul 24

A certified audit report has raised serious questions over lending practices at Punjab & Maharashtra Co-operative (PMC) Bank, revealing that loans worth ₹87.5 crore were sanctioned to Prithvi Realtors and Hotels, but no fund was ever disbursed. Despite this, the borrower’s account has been billed with interest inflating the payable amount to over ₹150 crore. Bizz Buzz is seen a copy of the report.

The audit, conducted by Deepak Singhania & Associates, Chartered Accountants, was based on records submitted in connection with an ongoing Arbitration Application involving PMC Bank and the borrower. Key documents reviewed include sanction letters, registered mortgage deeds, and official bank statements.

According to the audit, PMC Bank initially sanctioned a mortgage overdraft facility of ₹10 crore, later enhanced by ₹77.5 crore, bringing the total sanction to ₹87.5 crore. The loans were backed by 53,680 sq meters of non-agricultural land in Vasai, Thane. However, no disbursement or utilization entries have been recorded since October 31, 2012, even as interest continued to accrue.

“There is no reflection of disbursement of the sanctioned amounts, nor any record of repayment activity thereafter,” the audit report states.

The findings are further supported by a formal arbitration award, where the tribunal observed:

“The claimant engaged in a concerted scheme involving impersonation, deceit, and forgery… These acts amount to a deliberate and systematic fraud of a grievous nature.”

With arbitration barred in fraud cases per Supreme Court precedents, the matter is now under examination at the National Company Law Tribunal (NCLT), which is set to hear the case this week.

This case highlights a serious governance lapse where borrowers face mounting liabilities without receiving any sanctioned funds.

EoM.