Delhi HC issues notice in PIL to insure consumer deposits in PMC Bank’s Delhi branches

Delhi High Court has taken cognisance of a PIL seeking measures to insure the deposits of customers of the branches of Punjab & Maharashtra Co-operative Bank (PMC Bank) in the capital, reports legal news website barandbench.com.

The petition filed by one Bejon Kumar Mishra comes in the wake of the PMC Bank crisis, and 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’.

The petitioner had initially approached the Supreme Court, which however, declined to entertain it and asked him to the high courts.

A Division Bench of Chief Justice DN Patel and C Hari Shankar which took up the case has issued notice in the matter to the Central Government, the Delhi Government and the Reserve Bank of India (RBI).

The RBI had in September imposed regulatory restrictions on PMC Bank under Section 35A of the Banking Regulation Act, which placed a limit of ₹10,000 on the amount that could be withdrawn by the bank's customers. The limit was gradually increased to ₹40,000.

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.

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 next date of hearing in the case is January 22.