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The Supreme Court will on Friday hear a petition seeking redressal of certain aspects associated with the recent Punjab & Maharashtra Co-operative Bank (PMC Bank) scam.
Among other prayers, the petition filed by Bejon Kumar Misra seeks 100% insurance coverage for depositors who have accounts in co-operative banks.
Last month, 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 Pursuant to these restrictions, a limit was placed on the amount that could be withdrawn by the bank’s customers.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 has been gradually increased to Rs. 40,000 over the course of the last two weeks.
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.
It is 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.
The petition also calls for an overhaul in the functioning of co-operative banks and nationalised banks at a micro and macro level. It is further prayed for the Court to,
“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.”
The key cause for the strict measures against the bank appears to be its exposure of over Rs. 600 crore to real estate firm HDIL, which filed for bankruptcy recently.
According to reports, three persons who had accounts in PMC Bank lost their lives over the last 24 hours.
Read the petition: