PMC Bank Case: Bombay High Court Seeks Steps Taken by RBI

New Delhi, November 4, 2019:

Bombay High Court has sought steps taken by the Reserve Bank of India (RBI) to safeguard the interests of depositors of the Punjab and Maharashtra Cooperative (PMC) Bank.

A division bench, led by SC Dharmadhikari and RI Chagla, has directed the apex bank to file its affidavit. The bench added that it just wanted to know what the RBI was doing.

The bench was hearing the petitions filed by depositors. They challenged the restrictions imposed by the RBI on withdrawals. One of the petitions also sought permit to access their lockers associated with the PMC.

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As per reports, the court said that it did not want to interfere and dilute RBI’s authority over bank affairs. It added that the RBI would be the judge and not the court.

The court has scheduled another hearing on November 19. The Bombay High Court also said that the lawyers should refrain from giving false hopes to petitioners that the issue can be resolved by the Court.

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It may be stated here that the RBI had imposed regulatoy instructions on the PMC bank for six months starting from September 23. The decision came after financial irregularities were found out. RBI imposed restrictions on withdrawals, limiting it initially to Rs. 1,000 per customer for six months, then raising it to Rs. 10,000 and then later to Rs. 40,000.

The PMC bank’s crisis is one of the major fraud cases after the Punjab National Bank. Five persons, including the promoters of realty player Housing Development Infrastructure Ltd (HDIL) and the bank’s top management have been accused in PMC case.

PMC has deposits of at least Rs. 1,000 crore, according to reports.

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