Money & Banking

Depositors urge RBI chief to revive PMC Bank, ensure withdrawal of insured amount of ₹5 lakh

K Ram Kumar Mumbai | Updated on June 04, 2020 Published on June 04, 2020

File photo   -  The Hindu

Scam-hit Punjab & Maharashtra Co-operative (PMC) Bank’s beleaguered depositors have represented to Reserve Bank of India Governor Shaktikanta Das that their bank should be revived and that they should be allowed to immediately withdraw at least the insured amount of ₹5 lakh to take care of their needs amid the Covid-19 pandemic.

The representation, made under the aegis of PMC Depositors’ Forum, was pursuant to a Delhi High Court order (May 28) in the Bejon Kumar Misra (consumer rights activist) vs Union of India and others case.

The court observed that “upon receipt of any representation from any individual or group of depositors in this regard, the decision shall be taken by the concerned respondent authority within a period of four weeks”.

Chander Purswani, President, and SP Rao, Treasurer, PMC Depositors’ Forum, in a letter to the Governor, underscored that most of the depositors, especially senior citizens, depend on the interest on their fixed deposits in the bank for meeting monthly expenses.

Extreme hardships

According to them, in the last eight months (PMC Bank was placed under directions with effect from the close of business on September 23, 2019) depositors have faced extreme hardships, and have been pushed to the wall as withdrawal has been restricted to ₹50,000 of the total balance held in a depositor’s account.

“We have already seen 30 deaths of our PMC family members in these eight months. Moreover, due to Covid-19, things have worsened for all the depositors,” said the forum’s office bearers.

They underscored that depositors do not have money even to lead a normal life and live in respect and dignity despite having money in the bank. Further, there are certain depositors who cannot pay fees for their children’s education.

Protecting depositors’ interest

Purswani, in a telephonic conversation with BusinessLine, emphasised that depositors placed deposits with PMC Bank as they believed it is regulated by the RBI. If the RBI takes action against a bank in order to protect depositors’ interest, then by the same logic it should also move quickly alleviate their woes.

He wondered how anyone could meet household expenses in Mumbai or any other part of the country with a withdrawal limit cap of ₹50,000 (or ₹6,250 per month over eight months).

“We are, herewith, enclosing the list of 109 depositors who are senior citizens with all their details…we would urge and request to you kindly release their principal amount and the entire unpaid interest by modifying directions under section 35A (2) of the Banking Regulation Act , 1949, put on our PMC Bank,” said the forum.

The representation drew the Governor’s attention to a proposal given to the Deposit Insurance Credit Guarantee Corporation (DICGC) to infuse funds on temporary basis and revive PMC Bank.

Delhi HC petition

Misra had moved the Delhi High Court seeking, among others, directions to the respondents to urgently ease the moratorium on withdrawal of depositors money from PMC Bank; and/ or for ensuring withdrawal of at least the insured amount of ₹5 lakh immediately to cater to the medical and other urgent needs of depositors of PMC Bank during the current pandemic.

He also sought direction to the respondents to provide interim financial package for senior citizen depositors who are facing several health issues.

Published on June 04, 2020
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