SC to hear plea on protections for PMC Bank customers

PMC bank depositors protest outside Killa Court, in Mumbai, Wednesday, Oct. 9, 2019. Photo/PTI

The Supreme Court on Wednesday agreed to an urgent hearing on a plea seeking directions for interim protective measures for insuring around 15 lakh people whose money is blocked in the scam-hit PMC Bank.

The Punjab & Maharashtra Co-operative Bank has been put under restrictions by the Reserve Bank of India (RBI) following the discovery of a Rs 4,355-crore scam.

Deposit withdrawals have been capped at Rs 40,000 over a six-month period, causing panic and distress among the depositors.

The matter was mentioned for urgent listing before a bench of Justices N V Ramana, R Subhash Reddy and B R Gavai which said it would consider listing of the plea.

The petition has sought a direction for issuance of "exhaustive and comprehensive guideline" to safeguard the banking and co-operative deposits in the eventuality of the emergency financial crisis where citizens are financially stranded by the acts of a few "unscrupulous persons".

The plea, filed by Delhi-based Bejon Kumar Misra, said the Centre and the RBI should be directed to ensure complete insulation and insurance of the hard-earned deposited money of people in various co-operative banks, including nationalised banks, by enacting an appropriate measure of 100 per cent insurance coverage towards the deposited amount.

It said that a high-powered committee should be constituted to look into the complete affairs of working and their operation in all co-operative banks in order to have a robust and transparent mechanism that can inspire the confidence of the common public in co-operative banks.

The petition has also sought quashing of the RBI notifications restricting the limit of withdrawal of deposited amount in PMC Bank.

"Being aggrieved by financial sufferings of thousands of innocent depositors of PMC Co-operative bank, the question of accountability and propriety must be addressed to inspire the confidence of the crores of the people in the banking systems," the plea said.

A depositor of PMC Bank had allegedly committed suicide in Mumbai on Tuesday while another had died of a heart attack a few hours after taking part in a protest by the bank customers seeking their money back.

Real estate firm HDIL allegedly accounted for 70 per cent of the bank's Rs 9,000 crore advances.

According to the Mumbai Police's Economic Offences Wing, HDIL's loans turned Non-Performing Assets, but the bank management hid this from the RBI's scrutiny. 

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