Money & Banking

Customers mull legal action to revoke RBI order on PMC Bank, access funds

Our Bureau Mumbai | Updated on September 25, 2019 Published on September 25, 2019

Depositors gather outside PMC Bank’s Mahakali branch at Andheri, Mumbai, on Wednesday, to withdraw money   -  Vijay Bate

Thousands of distraught customers of Punjab and Maharashtra Cooperative Bank gathered at the bank’s branches in Mumbai for a second day on Wednesday to protest against the Reserve Bank of India’s direction to impose restrictions on withdrawal amounts.

Some of them said they would initiate legal action.

“I had saved up for my daughter’s marriage in December, but my money is now stuck,” said Harshit Rane, a customer. “I have no option but to approach the courts.”

He said he was in touch with like-minded customers.

Sawarna Maudaankar, 68, wondered why consumers were being penalised for the bank’s fault.

“I use this account for my daily expenses, and I cannot survive on ₹1,000 (the maximim permissible withdrawal).”

According to media reports, what triggered the RBI action was a loan extended by PMC Bank to the now-bankrupt real estate firm Housing Development and Infrastructure Limited (HDIL).

Political angle

The controversy turned political, with senior Congress leader Sanjay Nirupam writing to the RBI seeking action against the bank management and asking for the restrictions on withdrawal to be lifted.

Nirupam’s letter stated: “The bank has exposure in several real estate companies which should be investigated. RBI must explain... whether it was just HDIL which failed the bank or are there other such NPAs.

“Accountability must be fixed and RBI must lift the restriction of withdrawal...”

Analysts, however, said customers had few options. “Depositholders have a right to go to court against the bank, but the situation will take years to resolve. Unless the RBI acts fast, confidence in cooperative banks will fall,”said Founder Deepak Shenoy.

Experts said consumers should first withdraw the ₹1,000 permitted, and then look for other sources of money. If loan EMIs are linked to the PMC bank account, users should link it to another account.

RBI spikes rumours

Meanwhile, to assuage concerns over similar action over other banks, the RBI issued a statement rejecting rumours about closure of nine banks.

“Reports appearing in some sections of social media about RBI closing down certain commercial banks are false,” the RBI said in a tweet.

Published on September 25, 2019
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