Supreme Court To Urgently Hear Petition Seeking Interim Protective Measures To Insure Depositors Of PMC Bank

The Supreme Court has agreed to urgently hear a plea seeking directions for interim protective measures to insure around 15 lakh depositors whose money is blocked in the fraud-hit Punjab & Maharashtra Co-operative Bank (PMC Bank).

The matter was mentioned for urgent listing before a bench of Justices N V Ramana, R Subhash Reddy and B R Gavai which said that it would consider listing of the petition which has sought quashing of RBI notifications which have restricted withdrawal limits of amounts deposited in PMC Bank.

The petition, filed by Delhi-based Bejon Kumar Misra, has sought a direction for issuance of “exhaustive and comprehensive guidelines” to safeguard deposits in the eventuality of emergency financial crisis.

The petition mentioned that the Reserve Bank of India (RBI) had imposed regulatory restrictions on PMC Bank under Section 35A of the Banking Regulation Act.

Stating that the RBI's move had caused “disastrous consequences” for depositors, the petitioner has prayed that the RBI notifications issued by the banking regulator should be declared ultra vires Articles 14 and 21 of the Constitution.

The petition stated that the central government and the Reserve Bank of India (RBI) should be directed to ensure complete insulation and insurance of deposits in various co-operative banks, including nationalized banks, by enacting an appropriate measure of 100% insurance coverage towards deposited amounts.

The petition has urged that a high-powered committee should be constituted to look into the working and operations in all co-operative banks in order to have a robust and transparent mechanism which inspires confidence in co-operative banks.