PMC Bank Crisis: No Relief For Account Holders From Supreme Court

Supreme Courts asks the Account Holders to consult the High Court

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The Supreme Court today declined to entertain the plea of with the Punjab & Maharashtra Co-operative (PMC) Bank account holders. They had moved the court seeking a relaxation of withdrawal restrictions and were hoping for an early resolution from the apex court.

The restrictions were imposed last month by the Reserve Bank of India (RBI) under Section 35A of the Banking Regulation Act. Even though the Bench of CJI Ranjan Gogoi and Justices SA Bobde and S Abdul Nazeer did not give any immediate relief to the account holders but gave them liberty to approach High Courts instead.

The fraud

According to reports, the major cause of this crisis is the exposure that the bank had to bankrupt Housing Development and Infrastructure Limited (HDIL).

Promoters of real estate group HDIL, Rakesh and Sarang Wadhawan have requested the RBI and investigation agencies to sell off their assets, which includes a yacht, a Rolls Royce and an aircraft, to pay off the bank's dues.

The Wadhawans, who were remanded in judicial custody by a court on Wednesday, in a letter to the Enforcement Directorate, the Union finance ministry and the RBI, requested that they be allowed to sell off 18 of their attached assets.

The letter was released by a spokesperson of the Wadhawans.

HDIL Promoters Rakesh Wadhawan and his son Sarang were arrested on October 3. It is being said that Joy Thomas, who was the Managing Director of the bank had full knowledge of this fraud.

A few days ago, it came to light PMC Bank’s MD Joy Thomas owns 10 properties in Pune with his second wife, who he married after converting to Islam.

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