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SC to hear PIL seeking interim protection for PMC Bank customers on Friday

PIL seeks comprehensive guidelines to avoid another crisis like that of PMC Bank, seeks 100 per cent insurance of deposits

PMC Bank

The Supreme Court on Wednesday agreed to hear on Friday a Public Interest Litigation seeking interim protection for around 15 lakh customers of crisis-hit Punjab and Maharashtra Cooperative (PMC) Bank. The PIL also seeks laying down “comprehensive and exhaustive guidelines” to tackle crisis like the one at PMC Bank. Such crises, the PIL alleges, leads to disastrous consequences for the hard earned money of the common people, which is “plundered by few influential and unscrupulous people”.

The Punjab & Maharashtra Co-operative Bank has been put under restrictions by the Reserve Bank of India (RBI) following the discovery of Rs 4,355-crore scam. Deposit withdrawals have been capped at Rs 40,000 over a six-month period, causing panic and distress among the depositors.

On September 24, the RBI set the withdrawal limit at Rs 1,000 per account, which it increased to Rs 10,000 the next day. On October 3, this limit was increased to Rs 25,000. The RBI said it reviewed the bank’s liquidity position and, with a view to reducing the hardship of the depositors, it decided to further enhance the limit. With this relaxation more than 77 per cent of the depositors will be able to withdraw their entire account balance. In a statement, the RBI said a forensic auditor had been appointed by the administrator to look into the related transactions. Economic Offenses Wing of the Maharashtra Police is already investigating the matter.

Apart from guidelines, the PIL also seeks that the central government and the Reserve Bank of India should be the Centre directed to ensure complete insulation and insurance of the hard-earned money of people that they deposit in various cooperative and nationalised banks. This, the petitioner said, could be done by enacting an appropriate measure of 100 per cent insurance coverage towards the deposited amount. In Mumbai, the Economic Offences Wing of the police on Wednesday arrested Surjit Singh Arora, one of the former directors of the bank. This is the fifth arrest in the case.