Petition in Bombay HC opposes RBI curbs on PMC bank

A Public Interest Litigation was filed by a Mumbai-based NGO Consumer Action Network and eight other persons challenging the restrictions imposed by the Reserve Bank of India on the crisis-hit Punjab & Maharashtra Cooperative Bank (PMC Bank) in Bombay High court.

Mumbai (Maharashtra): A plea was filed on Monday in the Bombay High Court, challenging the restrictions imposed by the Reserve Bank of India on the crisis-hit Punjab & Maharashtra Cooperative Bank (PMC Bank).

The public interest litigation was filed by a city-based NGO Consumer Action Network and eight persons, who claimed to be depositors and account holders in the PMC Bank.

On September 23, the RBI had imposed regulatory restrictions on the PMC Bank for six months over alleged financial irregularities.

The withdrawal limit for account holders was initially kept at Rs 1,000 per each customer for six months, which was later raised to Rs 10,000.

The regulator has also banned the cooperative from extending fresh loans or taking deposits.

The restrictions had triggered protests by depositors and account holders of the cooperative lender.

The PIL criticised the RBI for its decision to put curbs on the beleaguered 35-year-old multi-state scheduled bank.

"The RBI decision is irrational and arbitrary and is violative of the fundamental rights of the common public. There was no prior intimation given by the RBI," the petition said.

It said the directives have caused anguish and suffering to common persons whose hard-earned money is locked in the bank's accounts.

The petition sought quashing of the RBI's decision.

The PIL appealed to the HC to direct the RBI to strengthen regulatory laws to ensure such situations do not arise in other banks.

The PIL is likely to come up for hearing before a division bench in due course.