The Reserve Bank of India (RBI) appointed administrator for Punjab Maharashtra Cooperative (PMC) Bank has informed the RBI that Wadhawans and PMC bank have not followed the due process of documentation for the property mortgage with the bank. According to sources, the Rs 3,500 crore land parcel which was kept as mortgage will face several hurdles to auction, as per the SERFESAI Act. After auctioning all those properties the bank was supposed to recover the huge amount.

The RBI administrator said this during a meeting held between RBI,  Economic Offences Wing and Enforcement Directorate on Thursday. According to sources, the PMC bank administrator JB Bhoria told RBI that the land parcels in Vasai, Virar, Nalasopara  worth Rs 3,500 crore, which were kept as mortgage to PMC bank by Wadhawans, have several lacunas. During valuation, the RBI administrator saw that the documentation process of mortgage properties was not done as per the rules and there are several loop holes, which are going to be a hurdle to auction these properties inorder to recover the money. The plots, which were mortgaged to PMC bank, are believed to recover the over 90 percent of the amount. The total fraud which was initially Rs 4,355 crore reached over Rs 5,000 crore after the forensic report.