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Seeking relief, senior citizen depositors of scam-hit Punjab & Maharashtra Co-operative (PMC) Bank have moved the Delhi High Court, asking that they be allowed to withdraw more money from their deposits as they face great hardships amid the pandemic.
Krishna Kumar Dixit, Sandeep Bhalla and others, in separate petitions, emphasised that many senior citizen customers of PMC Bank were dependent on the interest income on the deposits to meet day-to-day expenses. The RBI is among the respondents in the cases.
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Investors in Franklin Templeton, PMC Bank, DHFL are in the lurch with no access to their hard-earned money and little to no hope for their futureThe Mumbai-based co-operative bank, whose financial position deteriorated drastically due to alleged fraud/financial irregularities and manipulation of books of accounts, was placed under the RBI’s All-Inclusive Directions with effect from the close of business on September 23, 2019, following which the deposit withdrawal was capped.
Following protests from depositors, the RBI enhanced the limit for withdrawal from ₹1,000 (on September 24, 2019) to ₹50,000 (November 5) of the total balance in their accounts, in four stages.
Interest income
Referring to an RBI circular dated April 30, 2020, which enhanced the maximum withdrawal limit for medical expenses for critical life-threatening ailments to ₹5 lakh (from ₹1 lakh), Vivek Dixit, Counsel for Krishna Kumari Dixit, submitted that it only deals with life-threatening ailments. The circular does not take into account the hardship being faced by senior citizens who were dependent on the interest income they were receiving from the deposits made with the bank, he added. “Many senior citizen depositors of PMC Bank are totally dependent on the interest on their deposits. We don’t have any old-age social security scheme. We are only living on the interest income,” said Om Prakash Tekchandani, a senior citizen and depositor with PMC Bank.
“Some of these depositors are indisposed. They are not able to meet (non-critical) medical expenses. Prices of essential commodities have increased in the wake of the Covid-19 pandemic and they are not able to meet day-to-day expenses,” he added.
The RBI and the Centre should consider the plea of senior citizens for withdrawal of money, he further said.
Stark difference
Co-operative banking expert Krishna Damarla underscored that there is a stark difference in the regulator’s treatment of the depositors of YES Bank and PMC Bank.
“In the case of YES Bank, the entire operation of saving the bank and its depositors by asking State Bank of India and seven other financial intermediaries to step in (by collectively investing ₹10,000 crore) took just a week or more.
“But the depositors of PMC Bank are running from pillar to post for nearly eight months now without any relief. The irony of it is the striking similarity in the reasons for both the banks to get into trouble – some of the culpable borrowers in both are from the same business group,” said Damarla.
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