No Relief For PMC Depositors As Supreme Court Refuses To Hear Plea

The apex court said the PMC bank account holders can approach High Court concerned for relief.

Updated on: 18 October 2019 11:49 am

The Supreme Court has refused to entertain the plea of PMC bank account holders seeking lifting of restriction on cash withdrawals. The apex court said the PMC bank account holders can approach High Court concerned for relief.

A petition was filed in the Supreme Court seeking quashing of the Reserve Bank of India circular which has restricted the withdrawal, to Rs 40,000 only, by account-holders of the scam-hit Punjab and Maharashtra Cooperative (PMC) Bank.

Last month, the RBI had imposed regulatory restrictions on PMC Bank under the provisions of the Banking Regulation Act. The RBI has initially allowed depositors to withdraw a paltry Rs 1,000, followed by Rs 25,000 and now raised to Rs 40,000, but the customers have been demanding full access to all their accounts.

The fresh petition, filed by Vivek Dixit through advocate Satya Mitra, had sought direction to quash Section 35A of the Banking Regulation Act, 1949 and section 16(1) of the Deposit Insurance Credit Guarantee Corporation Act, 1961. Under Section 35A, the RBI has given power to prevent the affairs of any banking company.

The petitioner had submitted that Section 35A is being interpreted by the RBI as including the right to restrict withdrawal of amounts from the accounts of the depositors in certain circumstances. "Section 35A is a general section giving the RBI power to issue directions to the bank in respect of proper management. Such a section cannot be interpreted as including the power of the RBI to restrict withdrawal of deposits of depositors. A specific law would be needed for that purpose and such a law does not exist," the petition said.

In his plea, Dixit also told the court that his 75-year-old mother has filed a petition in the Delhi High Court seeking immediate relief to withdraw money to meet medical expenses for Dixit's 80-year-old father, who is bed-ridden. His mother was refused permission to withdraw money from the bank.

He also told the court that in pursuant to the Delhi High Court order dated October 17, his mother was permitted to withdraw Rs 40,000 as the bank conceded that the limit for withdrawal had been raised to Rs 40,000 vide RBI letter dated October 14.

(With Agency Inputs)