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Exceptions Can Be Carved Out for Med and Edu Emergencies of PMC Bank Depositors: HC to RBI

Representative image.

Representative image.

A bench of Chief Justice D N Patel and Justice Jyoti Singh asked the depositors, whose needs have been highlighted before the court in a PIL, to once again approach the RBI-appointed administrator of PMC bank giving details of their financial needs along for medical or educational reasons within three weeks.

The Delhi High Court on Monday said that according to the Supreme Court's decision on withdrawal of money by depositors of scam-hit PMC bank for exigencies, exceptions can be carved out for urgent medical and educational requirements. A bench of Chief Justice D N Patel and Justice Jyoti Singh asked the depositors, whose needs have been highlighted before the court in a PIL, to once again approach the RBI-appointed administrator of PMC bank giving details of their financial needs along for medical or educational reasons within three weeks.

The bench asked the administrator to look into the applications by the depositors and take a decision within a further period of two weeks and communicate the same to the court before the next date of hearing on February 26. During the hearing, the Reserve Bank of India (RBI) told the court that the apex court asked it to consider the educational and medical requirements of depositors as per directives issued by the top bank.

RBI said its directives only provide for considering medical emergencies and not educational emergencies which everyone would have. The bench, however, said the apex court has clearly mentioned both medical and educational emergencies and it was going to go by that.

The court was hearing an application by consumer rights activist Bejon Kumar Misra seeking directions to the RBI to consider other needs of PMC Bank depositors such as education, weddings and dire financial position, not just serious medical emergencies as being done at present. The application was filed through advocate Shashank Deo Sudhi in Misra's main PIL seeking directions to the RBI to ease the moratorium on withdrawals from the Punjab and Maharashtra Cooperative (PMC) Bank during the coronavirus pandemic.

Sudhi, during the hearing, contended that the apex court order had come when the situation was normal and now during the pandemic, the depositors have been able to withdraw only a total of Rs one lakh since restrictions on withdrawals from the bank was imposed by RBI in September 2019. He argued that it was very difficult for depositors to meet their various needs from just Rs one lakh in more than a year.

RBI argued that while it sympathises with the plight of the depositors, but everyone would have some or the other financial emergency and if money to the tune of Rs five lakh was released to all, as provided in case of medical emergencies, the bank would go under and depositors would not get their entire deposits back. RBI said it was trying to keep the bank functioning in the interests of the depositors and had floated an expression of interest for investing in it and has received some bids.

The PMC Bank has been put under restrictions, including limiting withdrawals, by the RBI, following the unearthing of a Rs 4,355-crore scam.

first published:January 18, 2021, 21:31 IST
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