PMC Bank: Delhi HC seeks reply from Centre, RBI on plea against withdrawl limits

New Delhi: The Delhi High Court on Friday sought a reply from the Centre, Reserve Bank of India and others on a plea against withdrawal limits in Punjab and Maharashtra Cooperative (PMC) Bank.

The Bench comprising of Justice DN Patel and Justice C Harishankar issued a notice to all respondents in the plea against withdrawal restrictions in PMC Bank.

The next date of hearing is January 22, 2020.

Bijon Kumar Mishra, who filed the petition through advocate Shashank Dev Sudhi also sought direction to insure the money of victim depositors lying blocked in PMC bank.

The petitioner also sought directions to all respondents seeking complete insulation and insurance of the hard-earned deposited money of the common people in various co-operative banks including nationalized banks by enacting of an appropriate measure in nature of 100 per cent insurance coverage towards their "hard-earned" deposited amount.

In his plea, Mishra sought directions from the court to constitute a high-powered committee for looking into the complete affairs of working and their operation in all co-operative banks in order to have robust and transparent mechanism which can inspire the confidence of the common people in co-operative banks.

"In the interest of justice with affected victim, depositors should be given the highest priority and who so ever responsible for the present financial crisis should be made accountable to the losses suffered by the affected victim depositors. It is a common knowledge that co-operative and nationalized banks of our country having only insured for Rs 1,00,000 with principal and interest money towards their entire deposited amount irrespective of each depositor," read the petition.

"Hence, an immediate amendment to the existing laws and appointment of an effective single regulator is the need of the hour to protect the interest of the innocent depositors and regulate all the financial affairs in an open and transparent manners to avoid such situation of financial crisis," it read further.

Petitioner Mishra contended that the RBI should exercise the power in terms of "Section 16 (1) of the DICGC Act 1961, which empowers for raising the limit of insurance cover with approval of the Central Government in the volatility of the financial situation prevailing over the PMC Co-operative bank leading to routine suicide deaths of common and innocent depositors of PMC Co-operative bank."

In September this year, the RBI restricted the activities of the PMC Bank for six months and asked it not to grant or renew any loans and advances, make any investment or incur any liability, including borrowing of funds and acceptance of fresh deposits after an alleged fraud of Rs 4,355 crore came to light.

The central bank had initially capped the deposit withdrawal at Rs 10,000 but later raised it to Rs 40,000.

The Enforcement Directorate (ED) has seized and identified movable and immovable assets worth more than Rs 3,830 crore owned by HDIL in connection with the case.