SC to hear plea on insurance for co-op bank customers

NEW DELHI: 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 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 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 Pursuant to these restrictions, a limit was placed on the amount that could be withdrawn by the bank’s customers.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 MUMBAI: The Enforcement Directorate on Wednesday sought custody of HDIL promoters Rakesh Wadhawan and his son Sarang in connection with the ₹4,355 crore Punjab & Maharashtra Cooperative (PMC) Bank scam.

Real estate firm Housing Development Infrastructure Ltd’s (HDIL) chairman and managing director Rakesh Wadhawan and his son were first arrested by the Economic Offences on October 3. The EOW alleged that the bank management, in cahoots with the Wadhawans, concealed from the banking regulators’ scrutiny huge loan defaults by the HDIL firms.

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 people in the banking systems,” the plea said .

Meanwhile he Economic Offences Wing of the Mumbai police on Wednesday arrested Surjit Singh Arora, one of the former directors of the PMC Bank.this is the fifth arrest.