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The response to two Delhi High Court directions — asking the Administrator to file a status report on the sale of assets and whether the government intends to infuse funds — in a case pertaining to the scam-hit Punjab & Maharashtra Co-operative (PMC) Bank is likely to give a fair idea to its beleaguered depositors about the fate of their deposits.
The Bank’s depositors, especially senior citizens, who have been running from pillar to post to get back their deposits, have taken legal recourse so that they can at least withdraw the interest earned on their deposits.
They said this will help them at least make a living/ subsist during the ongoing pandemic when the prices of essential commodities have gone up.
In the Sandeep Bhalla & others (petitioners) vs Reserve Bank of India (RBI) & others (respondents) case, the Delhi HC directed PMC Bank’s Administrator to file a status report indicating whether or not the sale of assets of the promoter-directors of Housing Development and Infrastructure Ltd (HDIL) has taken place.
In case the sale of assets has taken place, the status report will, inter alia, indicate the amount that has been garnered and the assets sold. HDIL is involved in the the alleged fraud of ₹4,355 crore in the Bank. Furthermore, the court wants the status report to give the details of the assets which have not been sold, along with their market value and the realizable value. It also needs to indicate the steps taken for the sale of these assets.
The Court asked the Union of India (UOI), Ministry of Finance, to file an affidavit indicating whether it intends to infuse funds to render support to the bank.
The Court said this direction has been issued in the context of an argument raised by the petitioner no 1 (Sandeep Bhalla) that, recently, the UOI had infused funds in Yes Bank, a private bank.
Eight financial institutions led by government-owned State Bank of India collectively infused ₹10,000 crore in a dramatic rescue of Yes Bank in March this year.
Referring to the withdrawal being capped at ₹50,000 of the total balance in their accounts for nine months up to June 22, 2020, Delhi HC Advocate Vivek Dixit opined that this cap needs to go up as the deposit insurance cover has gone up five times to ₹5 lakh.
Drawing attention to a recent RBI circular that enhanced the maximum withdrawal limit for medical expenses for critical life-threatening ailments to ₹5 lakh (from ₹1 lakh), Dixit emphasised that it only deals with life-threatening ailments. There are many senior citizens who are struggling with non-critical ailments, whose cost of treatment is also very high.
According to a RBI statement, PMC Bank was placed under directions with effect from the close of business on September 23, 2019, on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposures.
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