From the Viewsroom

Help out PMC Bank depositors

K Ram Kumar | Updated on July 09, 2020 Published on July 09, 2020

The RBI has been more focussed on rescuing YES Bank

The RBI will need to show some urgency in either putting the scam-hit PMC Bank back on rails or merging it with another bank. Depositors, many of them senior citizens with their life-savings stuck in the bank, have been finding it difficult to make ends meet, more so since the Covid pandemic.

About 40 depositors have passed on, probably heartbroken that either it may take years to get their hard-earned money back or nothing (save for the insured amount of up to ₹5 lakh) at all, since the bank was placed under RBI’s ‘All-inclusive Directions’ in late September 2019. Depositors complain that repeated pleas to the regulator and the government to help them have not galvanised them into action.

Though it has been more than nine months since PMC Bank plunged into a crisis due to the massive fraud perpetrated by the promoters of a real estate group and some bank officials, depositors are still unsure about the fate of the bank and their deposits. What is rankling them is that while the RBI and the Government acted with alacrity to ensure that YES Bank, which was on the verge of collapse in March 2020, was propped up, the same sense of urgency seems to be lacking when it comes to resolving the PMC Bank crisis. The ₹1 lakh per depositor withdrawal cap for the 15-month period between September 23, 2019 and December 22, 2020, too has not gone down well with them. Anguished depositors, who earlier used to get by on the interest earned on deposits, wonder how they can sustain themselves on ₹6,667 a month at a time when the prices of essentials have gone up and God forbid, if a medical emergency were to crop up.

The RBI, with its newly armed powers to regulate urban co-operative banks (UCBs), needs to reconstruct/revive/merge the bank and alleviate depositors’ sufferings without any delay. When borrowers’ burden can be mitigated, surely depositors of UCBs too need some ‘karuna’ (compassion) from the RBI in these Covid-ravaged times.

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Published on July 09, 2020
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