SC to hear plea for full insurance of all bank deposits

The Supreme Court on Wednesday agreed to an urgent hearing on a plea seeking directions for interim protective measures to insure around 15 lakh people whose money is blocked in the scam-hit PMC Bank. 

The Punjab & Maharashtra Co-operative Bank has been put under restrictions by the Reserve Bank of India (RBI) following the discovery of a Rs 4,355-crore scam. 

Deposit withdrawals have been capped at Rs 40,000 over a six-month period, causing panic and distress among the depositors. 

The matter was mentioned for urgent listing before a bench of Justices N V Ramana, R Subhash Reddy and B R Gavai which said it would consider listing of the plea. 

The petition has sought a direction for issuance of "exhaustive and comprehensive guidelines" to safeguard the banking and co-operative deposits in the eventuality of an emergency financial crisis where citizens are financially stranded by the acts of a few "unscrupulous persons". 

The plea, filed by Delhi-based Bejon Kumar Misra, said the Centre and RBI should be directed to ensure complete insulation and insurance of the hard-earned deposited money of people in various co-operative banks, including nationalised banks, by enacting an appropriate measure of 100 per cent insurance coverage towards the deposited amount. 

It said that a high-powered committee should be constituted to look into the complete affairs of working and their operation in all co-operative banks in order to have a robust and transparent mechanism which can inspire confidence of common public in co-operative banks. 

The petition has also sought the quashing of the RBI notification restricting the limit of withdrawal of deposited amounts in PMC Bank. 

"Being aggrieved by the financial 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 crores of people in the banking systems," the plea said. 

A depositor of PMC Bank had allegedly committed suicide in Mumbai on Tuesday while another had died of a heart attack a few hours after taking part in a protest by bank customers seeking their money back. 

Real estate firm HDIL allegedly accounted for 70 per cent of the bank's Rs 9,000 crore advances. According to the Mumbai police's Economic Offences Wing, HDIL's loans turned into non-performing assets, but the bank management hid this from the RBI's scrutiny.