PMC Bank case: Supreme Court to hear petition calling for 100% insurance coverage for over 15 lakh depositors today

The Supreme Court has agreed to grant an urgent hearing in the PMC Bank case. A public interest litigation (PIL) filed by Bijon Mishra for an urgent hearing in the case seeks full protection of savings of over 15 lakh depositors and 100 percent insurance cover.

The PIL will be heard by the apex court today (18 October), a CNBC-TV report said.

The PIL was filed by Bijon Mishra, who has sought the full protection of over 15 lakh affected bank customers and 100 percent insurance cover over their savings with the institution, the channel added.

The development comes even as panic escalates among PMC Bank account holders due to the uncertainties over their deposits, which have been stuck after the Reserve Bank of India put a restriction on the lender for six months owing to massive understatement of NPAs.

The Reserve Bank on Monday increased the withdrawal limits for depositors of the scam-hit Punjab & Maharashtra Cooperative Bank to Rs 40,000 from Rs 25,000 per account over the next six months.

File image of the Supreme Court. PTI

This is the third time the regulator has increased the withdrawal limits since its clamped down on the bank on 23 September when it had capped it a low Rs 1,000 per customer which led to lot of distress and criticism.

Since then PMC, which has among the top 10 cooperative banks with a deposit of over Rs 11,600 crore, is under an administrator appointed by the RBI the past management is being probed by the economic offences wing of the city police.

"After reviewing the bank’s liquidity position and its ability to pay its depositors has decided to further enhance the limit for withdrawal to Rs 40,000, inclusive of Rs 25,000 allowed earlier," RBI said in a statement.

Earlier, on 3 October, the RBI had raised the withdrawal limits for depositors to Rs 25,000 from Rs 10,000 per account.

“The Reserve Bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank,” the regulator said.

PMC Bank's exposure to HDIL group is nearly 73 percent of its total loan book size of Rs 8,880 crore as of 19 September 2019.

In an alleged confession letter to the RBI, the Bank's former MD Joy Thomas had accepted giving loans to realty developer HDIL and its related entity to the tune of Rs 6,500 crore without informing all the board members.