Top
News Updates

PIL Seeking Protection Of Depositors Of PMC Bank: Delhi HC Issues Notice To Central Govt, RBI

Akshita Saxena
1 Nov 2019 1:58 PM GMT
PIL Seeking Protection Of Depositors Of PMC Bank: Delhi HC Issues Notice To Central Govt, RBI
x
Your free access to Live Law has expired
To read the article, get a premium account.
    Your Subscription Supports Independent Journalism
Subscription starts from
599+GST
(For 6 Months)
Premium account gives you:
  • Unlimited access to Live Law Archives, Weekly/Monthly Digest, Exclusive Notifications, Comments.
  • Reading experience of Ad Free Version, Petition Copies, Judgement/Order Copies.
Already a subscriber?

Delhi High Court has issued directions to the central government, Reserve Bank of India, and others to file replies in a PIL addressing the issue of insurance and safeguards for depositors of Punjab and Maharashtra Cooperative (PMC) Bank.

Filed by social activist Bejon Kumar Misra, the petition demands the following from the court:

  1. Issuance of an interim protective measures for insuring all the consumers whose hard-earned money is blocked in PMC Co-operative bank branches of NCT of Delhi.
  2. Issue an exhaustive and comprehensive guideline 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 few unscrupulous persons which eventually leading to various personal irreversible catastrophes
  3. Issue directions to the central government and the RBI to ensure 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% insurance coverage
  4. Issue a direction to constitute a high-powered committee for looking into the complete affairs of working and their operation in all co-operative banks
  5. Issue directions to RBI for immediately exercising the power under the provisions of DICGC Act 1961 to provide complete financial insurance as per the respective deposits of the depositors unlike existing insurance cover for Rs 100000/- only irrespective of any amount of deposits

The Petitioner has mentioned in the petition that approximately 1500000 bank depositors around the country including Delhi have been restrained from withdrawal of their hard earned money from PMC Co-operative Bank and yet the deposited amount of those innocent and depositors are not secured.

It is also argued by the Petitioner that our country has minimum governance on the banking sector leading to numerous scams and host of financial syndicates taking advantage of the lacunas and loopholes in the existing laws and formulated regulations.

It is also averred in the petition that Deposit Insurance and Credit Guarantee Corporation (DICGC) 1961, which is a subsidiary of RBI, does not provide for 100% insurance to all types of deposits. Moreover, cooperative banks are not covered under the said Act.

The petition also emphasises that the co-operative structure is marred by the problem of not having a professional board. The board of directors of the co-operative banks are elected by the banks' members and the process is often gamed by politicians to gain control of the co-operative banks.

RBI had prohibited PMC Bank for carrying out any operations for six months on September 23rd.

PMC bank had been putting withdrawal limits on depositors. These limits started with a cap of ₹1,000 per account and was later relaxed to ₹10,000 in two days. The withdrawal limit was further relaxed to ₹25,000.

The Supreme Court on October 18 had refused to entertain a PIL seeking similar relief and dismissed the petition granting liberty to the petitioner to approach High Court.

Click here to download the petition

[Read Petition Here]


Next Story
Share it