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The Delhi High Court today issued notice in a petition seeking measures to insure the deposits of customers of the Punjab & Maharashtra Co-operative Bank (PMC Bank) branches in the capital.
Filed in the wake of the PMC Bank crisis, the petition by Bejon Kumar Mishra seeks issuance of exhaustive and comprehensive guidelines to safeguard deposits in the eventuality of such a financial crisis, where common people are financially stranded due to the acts of a few unscrupulous persons.
Mishra had initially filed the plea before the Supreme Court. However, on October 18, the Apex Court declined to entertain the same, giving the petitioner the liberty to approach the high courts instead.
Today, notice was issued in the matter to the Central Government, the Delhi Government and the Reserve Bank of India by a Division Bench of Chief Justice DN Patel and C Hari Shankar.
In September, the Reserve Bank of India (RBI) had imposed regulatory restrictions on PMC Bank under Section 35A of the Banking Regulation Act. Pursuant to these restrictions, a limit was placed on the amount that could be withdrawn by the bank’s customers. The initial cap on withdrawal of Rs. 1,000 had been gradually increased to Rs. 40,000 over time.
Stating that the RBI’s move has caused “disastrous consequences” for depositors, the petitioner has also prayed that the notifications issued by the banking regulator be declared ultra vires Articles 14 and 21 of the Constitution.
Among other prayers, the petition filed through advocates Shashank Deo Sudhi, Bijender Kumar and Dinesh Dakoria has sought 100% insurance coverage for depositors who have accounts in co-operative banks.
The petitioner has also alleged that the Centre and the RBI had not taken any emergency steps towards the protection of the hard-earned money of around 15 lakh customers of PMC Bank.
Therefore, the petition also called for an overhaul in the functioning of co-operative banks and nationalised banks at a micro and macro level and for the issuance of guidelines to safeguard banking and co-operative deposits in the eventuality of an emergency financial crisis.
The matter will be heard next on January 22.