New Delhi: The Reserve Bank of India (RBI) on Friday told the Delhi High Court that presently it would not be possible to raise the withdrawal limit of Rs one lakh imposed on scam-hit Punjab and Maharashtra Cooperative (PMC) Bank Ltd due to its lack of liquidity. RBI has told the high court that against a total deposit liability of approximately Rs 10,000 crore as on March 26, 2020, liquid assets available with the PMC bank were to the tune of Rs 2,955.73 crore which is “grossly insufficient” to fully pay all its depositors as 78 per cent of its loans/advances are non-performing.
It also told a bench of Chief Justice D N Patel and Justice Prateek Jalan that the insurance cover of Rs five lakh being provided to each depositor by the Deposit Insurance and Credit Guarantee Corporation (DICGC) — a wholly owned subsidiary of RBI — would be applicable only on cancellation of license of the bank which is not the case presently.
RBI, however, said that on the court’s suggestion it has revised its guidelines by permitting withdrawal of upto Rs five lakh on hardship grounds for treatment of critical life-threatening ailments such as cancer, and other illness affecting the heart, kidney or liver.
Even COVID-19 was being considered as a critical or life threatening ailment, it told the court.
RBI, in an affidavit filed in court, has also said that the withdrawal limit was extended from time to time and on June 19 it was capped at Rs one lakh which would enable 84 per cent of its depositors to withdraw their entire account balance.
It has said the main purpose of imposing the restrictions on the PMC bank were to avoid further damages to depositors, prevent alienation of its assets, provide it an opportunity to rectify the irregularities, improve its financial position and prevent preferential payments.
The affidavit was filed in response to an application seeking release of Rs five lakh to PMC bank depositors during COVID-19 to help them address health issues.
The application was moved by consumer rights activist Bejon Kumar Misra, through advocate Shashank Deo Sudhi, in his main petition seeking directions to the RBI to ease out the moratorium for withdrawal of deposited money of depositors from PMC Bank during the coronavirus pandemic.
Misra had claimed in his application that despite depositors making representations to the bank or RBI for withdrawal of money owing to financial difficulties or medical exigencies, no action has been taken till date to help the depositors.
RBI, during the hearing on Friday, denied the allegation and asked the petitioner to show one instance where a depositor was denied funds on making a representation.
The bench, thereafter, adjourned the matter to August 21 by when Misra has to give a list of those depositors who are in urgent need for funds.
The court on May 28 had asked the Centre, the RBI and PMC Bank to appreciate the difficulties faced by the depositors on withdrawals during COVID-19 pandemic.
PMC Bank has been put under restrictions by the RBI, following the unearthing of a Rs 4,355-crore scam.