Saturday, February 4, 2023

Delhi High Court pulls up RBI over PMC Bank withdrawal curbs

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The Delhi High Court on Tuesday pulled up the Reserve Bank of India for asking the Punjab and Maharashtra Co-operative (PMC) Bank to decide and determine what illness will constitute critical illness and the amount to be paid to depositors. 

While calling RBI’s action unsatisfactory, the Court asked it to step in and take the decisions itself and not take the bank’s decision as the gospel truth, specially when the restrictions were placed by RBI itself. 

This Delhi HC observation has come after the direction to the RBI, PMC Bank and others to consider the needs of the depositors during the Covid-19 pandemic induced lockdown. 

A division bench of Chief Justice DN Patel and Justice Prateek Jalan has given time to Reserve Bank of India to file its reply and adjourned the case to January 4, 2021. The application was filed by Bejon Kumar Mishra seeking directions to include financial emergencies as a ground for depositors to withdraw their money from PMC Bank.  

“What you’re saying is completely unsatisfactory. The restrictions have been set by RBI so RBI needs to use its mind, you cannot leave it to PMC Bank and accept what they say as the gospel truth. What is the point of your filing a status report then?” Justice Prateek Jalan observed.

The interim application filed by petitioner has sought directions to the PMC Bank, RBI and others to set up a court-monitored special investigation team for a transparent probe in a time-bound manner. 

The petition claimed the investigation is being dragged resulting in complete helplessness and uncertainty towards the hard-earned money of innocent depositors. The RBI had capped the withdrawal limit and restricted the activities of PMC Bank after an alleged fraud of Rs 4,355 crore had come to light. The petitioner sought directions to provide adequate money in all types of emergencies and for steps to build confidence in common depositors to prevent the unfortunate death of depositors on account of not being able to get their money in time of distress. 

During the hearing, petitioner’s counsel Advocate Shashank Deo Sudhi had submitted before the Court that only 13 depositors have been found eligible for getting Rs 5 lakh while the rest were found ineligible according to the RBI affidavit. According to him, the depositors were not being given access to their own hard earned money.

The petitioner being a social activist and aggrieved by the pains and continuous suicidal deaths of the depositors of PMC Co-operative Banks had filed the plea in the interest of public at large seeking issuance of directions and interim protective measures for protection of all the depositors whose hard-earned money is blocked in PMC Bank. 

Also Read: Supreme Court dismisses plea seeking action against Andhra Pradesh CM Jaganmohan Reddy, says similar prayer being heard in another petition

The plea also sought issuance of an exhaustive and comprehensive guidelines to safeguard the banking and co-operative deposits in the eventuality of emergency financial crisis where common people are financially stranded by the acts of a few unscrupulous persons.

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