Former PMC Bank managing director Joy Thomas admitted in a September 21, 2019 letter to the Reserve Bank of India that the bank had misled the regulator for six or seven years by concealing and misreporting defaults on loans to HDIL, according to Scroll’s October 1, 2019 report. Thomas said he feared that classifying the large loans as non-performing assets would hurt profitability and damage the bank’s reputation. That is his reported explanation, not an independently established institutional motive.
What Thomas admitted—and why he said defaults were hidden
Scroll reported that Thomas wrote to the RBI on September 21, 2019, admitting that PMC Bank had concealed and misreported HDIL loan defaults for six or seven years. The report described HDIL as a crisis-hit real estate group. The ₹6,500 crore figure Scroll cited was its contemporaneous reported amount for the concealed and misreported defaults.
In the letter excerpt quoted by Scroll, Thomas said that classifying the loans as non-performing assets (NPAs) would have affected profitability and created reputational risk. His explanation was a fear of consequences for the bank; the cited reporting does not independently establish that as the motive of the institution as a whole.
“As the loans outstanding were huge and if these were classified as non-performing assets it would have affected the profitability of the bank… this would have created reputation risk for the bank,” Thomas wrote, according to Scroll.
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Thomas also wrote that the bank charged 18% to 24% interest on the loans and earned a profit, Scroll reported. That rate and profit statement comes from the letter excerpt; it is not an independently audited finding in the cited account.
How the reported concealment worked
Scroll’s account of the letter describes concealment in loan reporting and in the account records used to respond to scrutiny:
- Some HDIL-linked accounts were reported as standard even though they were performing poorly.
- Subsequent overdue amounts were not reported to the board, auditors, or regulators, according to the report.
- Thomas said that after the RBI began seeking account details in 2017, stressed HDIL accounts were replaced with dummy accounts.
These details are allegations and admissions as reported from Thomas’s letter, not a substitute for a final court finding. Scroll also reported that PMC Bank’s total loan size as of September 19, 2019 was ₹8,880 crore and that HDIL exposure represented nearly 73% of it, citing PTI and unnamed sources for those calculations. Those figures have a different basis and date from the ₹6,500 crore reported default figure.
What the RBI did, and how the bank was resolved
The RBI’s official account of its action says All-Inclusive Directions for PMC Bank took effect on September 23, 2019, in the interest of depositor protection. The RBI later published a draft scheme to amalgamate PMC Bank with Unity Small Finance Bank.
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The Government of India notified the amalgamation on January 25, 2022. On March 31, 2022, the Deposit Insurance and Credit Guarantee Corporation (DICGC) said it had settled its main claim for 8,47,506 traceable depositors, totaling ₹37,91,55,33,367.64. This is DICGC’s reported claim settlement following the merger notification; it should not be confused with either the 2019 reported HDIL default figure or the later Enforcement Directorate case amount.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the later ED action does—and does not—establish
On February 23, 2024, the Enforcement Directorate (ED) said it had provisionally attached property worth ₹13.20 crore in connection with a PMC Bank loan-fraud case. The ED stated that the total amount involved was ₹6,117.93 crore, comprising ₹2,540.92 crore in principal and ₹3,577.01 crore in interest.
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These are figures and an enforcement action reported by the ED in describing its investigation. A provisional attachment is not a final criminal-court judgment. The cited sources do not establish the final court disposition for Thomas or other accused.
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How to read the different figures and stages
| Figure or action | What it refers to | Source and qualification |
|---|---|---|
| ₹6,500 crore | Concealed and misreported HDIL loan defaults reported in 2019 | Scroll, October 1, 2019; contemporaneous report, not the later ED case amount |
| ₹8,880 crore; nearly 73% | PMC Bank total loan size as of September 19, 2019; reported HDIL share | Scroll attributed the underlying exposure calculation to PTI and unnamed sources |
| ₹37,91,55,33,367.64 for 8,47,506 depositors | DICGC main claim settled for traceable depositors following the amalgamation notification | DICGC, March 31, 2022 |
| ₹6,117.93 crore total; ₹13.20 crore property | ED’s stated case amount and property it said it provisionally attached | ED, February 23, 2024; agency statements about its investigation and action, not a court ruling |
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