Delhi HC asks as to why and how depositors of PMC Bank are different from those of YES Bank; RBI and Centre to file affidavits

The Reserve Bank of India (RBI) and the Centre have been directed to file additional affidavits by the Delhi High Court on causes that propelled the constitution of the YES Bank Reconstruction Scheme, 2020. The affidavits will have to state how depositors of PMC Bank are in different circumstances compared with those of Yes Bank.

In March this year, the RBI constituted the YES Bank Reconstruction Scheme, 2020 and was approved by the Union Cabinet with the aim of protecting the depositors’ interest. The Finance Minister had back then said that the decision to provide a reconstruction scheme keeps at its core the protection of depositors’ interest, providing stability to YES Bank and keeping a stable financial environment and banking system.

Justice Rajiv Shakdher of the Delhi High Court directed the RBI to file an affidavit as to what prompted it to take action in the “public interest” to secure the interest of the depositors of YES Bank and the reason why the Union of India (UOI) accorded sanction to the Reconstruction Scheme and the reason why the scheme was funded.

The Delhi High Court also directed the RBI and the Centre to mention in their affidavits as to how the depositors of PMC Bank are differently circumstanced in comparison to the depositors of YES Bank. The Court added that, “The circumstances created by the Coronavirus pandemic affects even the depositors of the PMC Bank.”

The Petitioner Sandeep Bhalla and many others sought directions to the RBI to issue a statement on timeliness and safety of deposits held by the depositors with the PMC Bank and to ensure payments to ensure that the petitioners and depositors and paid their money in full along with interest. The plea had also sought directions to the RBI to issue necessary instructions to allow the petitioners and depositors especially senior citizens who had deposited their money with the PMC Bank to withdraw amounts up to the interest on their deposits so as to enable them to make their living/ for subsistence.

The matter will be heard next on August 8, 2020.