RBI must remove limits on withdrawal, stringent rules: Plea in HC

Days after the Punjab and Maharashtra Cooperative (PMC) Bank’s sudden closure, over 10 depositors or account holders have moved the Bombay High Court, highlighting the inconvenience they are facing. The bank’s customers and an NGO, have urged the HC to set aside the withdrawal limit imposed upon them by the Reserve Bank (RBI).

The plea by the Consumer Action Network challenges the ‘irrational and arbitrary’ directions issued against the account holders/ depositors of the bank by RBI, which lets them withdraw only Rs 10,000 once in six months.

“The directions are arbitrary, irrational and without application of mind, as it is against the lakhs of depositors or account holders, who have deposited hard-earned money in PMC bank,” the plea reads.

“The RBI as well as the PMC bank are keeping the account holders/ depositors in dark. They are being penalised by not allowing them to withdraw their own deposited money, which is only causing hardship and inconvenience to the public at large,” the plea adds. The petition refers to the provisions of the RBI Act, under which the central bank has imposed a series of curbs on the operations of PMC bank. The petitioners have claimed the provisions of the RBI Act are clear in terms of public interest.

“It cannot be interpreted as to penalise the public in general in any way and in any situation. Under the guise of so-called public interest, the RBI move, instead of protecting public interest, penalises the public at large, as account holders of the PMC bank are being deprived of their rights to have access to their own property, which is itself contrary to the law,” the plea stated.

Notably, the RBI has clarified that any transaction of the PMC would be pre-scrutinised and approved by the central bank or the administrator it has appointed, to look after the now closed bank.