Bombay HC directs RBI to enlist steps taken to help PMC Bank Depositors

The Bombay High Court on Monday directed the Reserve Bank of India (RBI) to file an affidavit in pleas filed by depositors of Punjab and Maharashtra Cooperative Bank seeking to quash limits put on withdrawals for a period of six months..A Division Bench of Justices SC Dharmadhikari and RI Chagla asked RBI to file a response enlisting necessary steps to prevent further damage to the depositors by November 13..Senior Counsel Venkatesh Dhond, appearing for RBI submitted that the Central Bank will file a short affidavit in this regard within a week..Justice Dharmadhikari said if it is satisfied with RBI’s reply, it will not interfere in the matter. It further said that it cannot issue directions to the RBI at the moment..“We are not magicians. Do not give false hopes to the people standing behind you (account holders). If we are satisfied with RBI’s reply, we will not interfere further.” .Justice Dharmadhikari further added,.“We only want to know what RBI has done and is doing and we will not interfere and dilute RBI’s authority”..Moreover, advocate Tamsin Monis, appearing for one of the petitioners Prajakta Waikar submitted that depositors are unable to access their bank lockers and sought directions in that regard..To this, the Court said that it cannot issue directions and the petitioner can approach the bank..The petitioners in their writ pleas and Public Interest Litigation have highlighted that the RBI restriction on the PMC Bank is detrimental to account holders or depositors at large, who have invested their own hard-earned money in the Bank..The pleas state that the RBI’s decision under Section 35 (A) of the Banking Regulation Act, 1949 taken under the guise of ‘public interest’ deprives depositors their rights to have access to their own property, which itself is contradictory with the provisions of the Act..It is submitted by Consumer Action Network in their plea that the Banking Regulation Act is very clear in terms of public interest and it cannot be interpreted as to penalize the public in general..Calling this RBI directive irrational and arbitrary, the petitioners have claimed that the same is violative of Articles 14, 19 and 21 of the Constitution of India. The pleas also seek the framing of strict banking regulations..In a petition filed by one Haresh Raisinghani, the directions have been sought for Deposit Insurance and Credit Guarantee Corporation to make sufficient funds available for easy and unhindered withdrawal of their deposits for day to day expenses for educational and health and business purposes..The RBI had recently ordered the PMC bank not to do any business for six months and put withdrawal limit on account holders/depositors of the bank for a period of six months..The Court will hear all matters related to the PMC Bank crisis together on November 19..[Read Order here]