Bhim S Makkad, 75, a depositor with Punjab and Maharasthra Co-operative Bank (PMC Bank), is suffering from a brain stroke and his wife is a heart patient. He has withdrawn ₹1 lakh from the bank and wants to withdraw more.

Tajinder Pal Singh is heart patient and has parked all his life savings as well as the money earned from the sale of his house into his PMC Bank account. He now lives in a rented house, and his son, who was earlier paying the rent and daily expenses, has lost his job due to the Covid-19-led economic slowdown. Singh, too, is keen to withdraw more cash from the troubled bank.

Geetika Saihgal, another depositor of PMC Bank, also needs to access her money to “survive”. She needs funds for the treatment of liver disorder and to fund her children’s education.

These are just three cases from a list of 196 depositors, where PMC Bank has said it has not received any request for hardship money.

Status report

In fact, a status report in respect of depositors seeking such withdrawals from PMC Bank, has revealed that about 12 requests from a list of 196 have been approved or are being processed by the bank.

The report was submitted by the Reserve Bank of India to the Delhi High Court, in case of a Writ Petition filed by consumer rights activist Bejon Kumar Misra, seeking directions to the RBI to ease the moratorium on withdrawals from PMC Bank during the coronavirus pandemic.

For a large number of depositors, PMC Bank has said the customer has not submitted any request under hardship under critical illness. For some customers, it has also said they have not withdrawn the full ₹1 lakh that is available, while in case of some others, it requires additional details.

The Delhi High Court had, in August, asked Misra to submit a list of persons who are in need of money and want to withdraw it from PMC Bank under limits prescribed by the RBI due to medical emergency due to the Covid-19 pandemic. The RBI then had to respond on the status of the withdrawal. The status report was prepared by PMC Bank.

“As per the extant practice, with a view to expediting decisions on the requests of depositors for withdrawals on grounds of hardship, the RBI has delegated the powers to examine and sanction eligible cases of request for hardship withdrawal (including medical emergencies owing to critical ailments) to PMC Bank, and such depositors have to approach the bank with requisite documentary evidences for withdrawal,” the RBI had informed the Delhi High Court.

Eligible depositors can withdraw up to ₹5 lakh for life-threatening ailments such as cancer, and other ailments affecting organs that include heart, kidney and liver. Payments are made directly to the hospital and are allowed after they are examined by the bank’s screening committee.

The case is scheduled to be taken up for hearing on Friday (October 16).

Not a universal list

Misra noted that the list is just a sample of the applications by borrowers and not a universal list, and depositors have been unable to withdraw their money for over a year now.

“There is no proper definition of hardship, so what is the basis of rejecting and approving application. Moreover, no timelines are given by the RBI, and on some pretext they are misusing the provision of 35A against the interest of the bank depositors. Deepawali is round the corner and they expect depositors to survive on ₹1 lakh for more than 12 months. There have been more than 50 deaths, and many are on the verge of death,” he told BusinessLine .

Chander Purswani, President, PMC Depositors’ Forum, called for resolution of PMC Bank’s problems. “It is high time that there is a resolution of PMC Bank’s problems, especially after amendments to the Banking Regulation Act. A lot of the depositors are suffering and now each depositor requires his or her withdrawal access,” he said, while requesting the merger of the bank with a public sector lender.

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