HC seeks RBI reply on PMC Bank crisis

The Bombay High Court has asked the Reserve Bank of India (RBI) to file an affidavit stating steps it has taken to protect the interests of depositors of the Punjab and Maharashtra Cooperative (PMC) Bank. The high court said it only wants to know what the RBI has done and is doing to alleviate the problem of PMC bank depositors. The court said it will not interfere and dilute RBI’s authority and refused to grant any interim relief in the matter.

A division bench of Justices S.C. Dharmadhikari and R.I. Chagla was hearing a bunch of petitions filed by the bank depositors challenging the restrictions imposed by the RBI on withdrawals. On September 23, the RBI imposed regulatory restrictions on the PMC Bank for six months over alleged financial irregularities. The withdrawal limit for account holders was initially Rs 1,000 each customer for six months, which was later raised to Rs 10,000 and then to Rs 40,000.

On Monday, when the petition came up for hearing, the bench said it only wanted to know what the RBI was doing in the case. “The RBI is the bankers’ bank and an expert body on such issues. We don’t want to interfere and dilute your authority,” the court said.

It said in such financial issues, the RBI would be the judge and not the court. It directed the RBI to file its affidavit and posted the matter for hearing on November 19.

One of the petitioners sought direction to the RBI to permit depositors to access their lockers. The court, while refusing to pass any order, said, “The court cannot allow access. How can anyone or we prevent the RBI from taking action? If the RBI says stay away from the bank, then do so.”

It said the depositors could sue the bank if they wanted.

The bench said by filing multiple petitions, lawyers should not give false hopes to depositors that the courts will help them.