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Opinion

HC detains RBI for letting PMC bank decide depositors’ money requests in emergencies

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On Tuesday, the Delhi High Court detained the RBI for letting PMC Bank decide which emergencies cited by its depositors should be considered for the disbursement of Rs 5 lakh, saying the central bank imposed the restrictions it should have. been the one who made the decision.

The Cooperative Bank of Punjab and Maharashtra has been subjected to restrictions, including limitation of withdrawals, by the RBI, following the discovery of a 4,355 million rupee scam.

“The Reserve Bank of India (RBI) had to apply its mind and not act like a post office. If you (RBI) have imposed the restrictions, then you must apply your mind. You cannot accept what the PMC bank says as gospel truth. You cannot let PMC Bank decide who it will disburse the funds to, “said a bank from Chief Justice DN Patel and Justice Prateek Jalan.

“This is not satisfactory. You can’t let PMC bank decide. There has to be some way to monitor it. something independent of the administrator (appointed by RBI) ”, added the bank.

The court was hearing a request from consumer rights activist Bejon Kumar Misra for instructions for the RBI to consider other needs of PMC’s bank depositors, such as education, weddings, and a desperate financial situation, not just serious medical emergencies like it is done today.

The request was submitted through advocate Shashank Deo Sudhi at Misra’s main PIL seeking instructions to the RBI to ease the moratorium on withdrawals from PMC Bank during the coronavirus pandemic.

During Tuesday’s hearing, the bank told RBI that “there should be an open valve for depositors to access their money” and asked it to consider gradually increasing the withdrawal limit from its current limit of 1 lakh rupee per bill.

The bank also told RBI that there should be a complaint redress mechanism to address complaints from depositors who are dissatisfied with the decision made by the PMC bank or the manager appointed by the superior bank.

The court also told Misra that while depositors must have some recourse, the restrictions on withdrawals cannot be lifted as the PMC bank would collapse and no one will receive money.

“We have to find a balance. There is a limited corpus available with PMC Bank. Therefore, there has to be a gradation of the difficulties that depositors face, ”the bank said.

The court gave RBI four weeks time to file its response to the request and listed the matter for its hearing on January 4, 2021.

On May 28, the court had asked the Center, RBI and PMC Bank to appreciate the difficulties depositors faced with respect to withdrawals during the COVID-19 pandemic.

Hindustan Times

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