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:
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]