PMC Bank Crisis: HDIL Says Loans Were Taken After Giving Adequate Security Cover

Housing Development & Infrastructure Ltd. on Tuesday said that loans taken from banks, including crisis-hit Punjab & Maharashtra Cooperative Bank, were in normal course of business after providing adequate security cover.

HDIL is ready to hold discussions with PMC Bank to protect the interests of depositors.

The Mumbai Police on Monday filed a case against the former bank management and promoters of HDIL in the PMC Bank case and said a Special Investigation Team will be probing the case.

Replying to clarification sought by the stock exchanges, debt-laden HDIL said its books of accounts are audited and reflect true and fair picture of the company's business.

"The company, has over a period of time, availed of banking facilities from various banks and institutions including PMC Bank in the normal course of business," HDIL Vice Chairman and Managing Director Sarang Wadhawan said in a regulatory filing.

"Adequate security cover in favour of the banks including PMC Bank has been created" over the assets of the company for these facilities in due compliance with all banking regulations set by the Reserve Bank of India, he added.

According to Wadhawan, HDIL is facing a temporary cashflow issues due to a slowdown in the real estate sector. As a result, he said, the company has been admitted under the Insolvency and Bankruptcy Code, 2016, but was "actively attempting to resolve" the debt issues.

PMC Bank’s now-suspended Managing Director Joy Thomas has reportedly admitted to RBI that the bank's actual exposure to HDIL is over Rs 6,500 crore—four times the regulatory cap or 73 percent of its entire assets of Rs 8,880 crore.

"In relation to borrowings from PMC Bank, we have already issued letters requesting an appointment with the administrator in charge of the bank to put forth the true and correct picture as also to discuss a strategy hereby the interest of all stakeholders and in particular PMC Bank and its Depositors is protected," Wadhawan said.

He said the company would take all necessary steps and extend full cooperation with any and all agencies/authorities during this period.

"We would endeavour to put in place plans to address interest and aspirations of all the stakeholders and extend full cooperation with the regulators and authorities during this time," Wadhawan said.

He also said the company was not aware of any action against HDIL and its promoters. "HDIL has been made aware of certain regulatory action against PMC Bank and its management. It is also learnt that certain action is being initiated against HDIL and its Promoters. We are unaware of any action against HDIL and its promoter.”