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Awas Developers contests Rs 170 cr liability in PMC bank loan row

New Delhi: The Punjab and Maharashtra Co-operative (PMC) Bank financial scandal has run deeper, with Awas Developers and Construction Pvt. Ltd. the latest company caught in its shady lending activities.

Awas Developers was sanctioned credit facilities worth Rs 135 crore between the years 2008 and 2019, but saw only Rs 30 crore being disbursed, and that too prior to August 2012, a forensic audit by Deepak Singhania and Associates said.

Notwithstanding no further disbursements under altered credit limits approved in 2015, 2017, and 2019 — aggregating to Rs 75.25 crore, Rs 65.25 crore, and Rs 135 crore respectively — the bank went on incurring interest. This raised the company’s overdues liability to Rs 170.30 crore on paper.

Awas Developers has challenged the claim in arbitration, contending that its liability must be limited to the Rs 30 crore it actually received. The firm says it had mortgaged various properties in Mumbai, Thane, and Palghar on the expectation of full loan disbursal, which never came about.

This instance mirrors such allegations against Prithvi Realtors and Hotels Pvt. Ltd., which was allegedly penalized Rs 87.5 crore without the receipt of any funds, but had the burden of inflated liabilities of over Rs 150 crore for having carried forward interest on accumulated interest.

A 2019 Reserve Bank of India audit at PMC Bank revealed grand-scale fraud, such as more than 21,000 inauthentic loan entries utilized to conceal bad debts and create interest income.

While legal action continues, Awas Developers asserts that it cannot be made liable for membership dues on the basis of spurious transactions, highlighting gross regulatory failings and potential insider connivance at PMC Bank.

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