PMC Bank Crisis: Bombay HC asks RBI to file affidavit stating steps taken for depositors

Bombay HC has asked RBI to file the affidavit by November 13 and the matter will again be taken up on November 19. The court has refused to issue any further directives till then for the crisis-hit PMC Bank depositors

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On Monday, Bombay High Court asked the Reserve Bank of India (RBI) to file an affidavit and inform the court about the steps taken by them to protect the interest of the Punjab and Maharashtra Cooperative (PMC) Bank account holders. RBI has been asked to submit the affidavit by November 13 and the matter will be taken up again on November 19.

In the meantime, the court has denied any intervention, including issuing any further directives till then or announce any relief for the crisis-ridden PMC Bank depositors. The high court also added that if RBI provides a reasonable explanation in its affidavit, the court will not interfere in the matter.

A division bench of Justices S C Dharmadhikari and R I Chagla was hearing petitions filed by the bank depositors, challenging restrictions imposed by the RBI on withdrawals. The restrictions had been imposed on the PMC Bank for six months in the wake of alleged financial irregularities.

The withdrawal limit for account holders was initially ₹1,000 per each customer for six months, which was later raised to ₹10,000 and then to 25,000 and is now at ₹40,000.

The RBI knows all the affairs of the bank in question. The RBI is the bankers' bank and an expert body on such issues. We don't want to interfere and dilute your (RBI's) authority," the court said.

Bombay High Court has directed the RBI to file its affidavit and posted the matter for further hearing on November 19. The court refused to grant any interim relief in the matter.

The entire crisis had risen after the alleged involvement of realty player Housing Development Infrastructure Ltd (HDIL), who had hidden from regulators' scrutiny, turning non-performing assets. So far, five people, including HDIL promoters and bank's top management, have been arrested.

Prior to this, RBI-appointed experts had started valuating the Housing development infrastructure Limited (HDIL) properties, which were mortgaged with the Bank so that they could be auctioned. Once the properties are auctioned the money will be infused in the bank to pay the depositors.

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