E-Paper
SC to hear plea on insurance for co-op bank customers after PMC bank fraud
The plea by petitioner Bijon Kumar Mishra was mentioned before a bench led by justice NV Ramana for urgent hearing, a plea that was accepted.
The Supreme Court will hear on Friday a petition seeking 100% insurance coverage of deposits made by customers of cooperative banks, a case that follows the fraud at Punjab & Maharashtra Co-operative (PMC) Bank.
The plea by petitioner Bijon Kumar Mishra was mentioned before a bench led by justice NV Ramana for urgent hearing, a plea that was accepted.
The petition sought a direction for issuance of “exhaustive and comprehensive guidelines” to safeguard the deposits of customers in the eventuality of a crisis wherein citizens are financially stranded by the acts of a few “unscrupulous persons”.
The Reserve Bank of India (RBI) last month imposed regulatory restrictions on PMC Bank under section 35A of the Banking Regulation Act. Pursuant to these restrictions, a limit was placed on the amount that could be withdrawn by the bank’s customers. The initial cap was ₹1,000 and this was gradually increased to ₹40,000.
The RBI’s move has caused “disastrous consequences” for depositors, Mishra stated in his petition, which also asked the court to declare notifications issued by RBI as unconstitutional. Mishra said both the Centre and RBI had failed to take emergency steps to protect the hard-earned money of 1.5 million customers of PMC Bank.
“Being aggrieved by financial sufferings of thousands of innocent depositors of PMC Co-operative Bank, the question of accountability and propriety must be addressed to inspire the confidence of the crores of the people in the banking systems,” the plea said
