‘We are in process to setup small finance bank which will take over PMC Bank’, says RBI in Delhi HC, BFSI News, ET BFSI

The Reserve Bank of India on Monday said it has given “in-principle” approval to one Centrum Financial Services Ltd (CFSL) to set up a small finance bank (SFB), which will take over the beleaguered Punjab and Maharashtra Cooperative Bank (PMC Bank) very soon.

After the submission, Senior Counsel Jayant Mehta representing RBI sought time to file an affidavit in this regard.

The Bench of Justice DN Patel and Justice Jyoti Singh on Monday, after taking note of the submission on behalf of the RBI adjourned the matter for August.

Advocate Shashank Deo Sudhi who appeared for the petitioner submitted that more than five dates had been given and the hardship money had not been released. He further submits that the common depositors are condemned to lead humiliated lives without any money at the time when the depositors are in the need of money.

The interim application was filed in the pending petition filed by Bejon Kumar Misra, challenging withdrawal limits in Punjab and Maharashtra Cooperative (PMC) Bank.

Earlier, RBI in a response filed in Delhi High Court stated that depositors are already allowed to withdraw up to Rs 5 lakh on hardship grounds for treatment of terminal illnesses, including treatment of COVID-19. It is the duty of Punjab Maharastra Cooperative (PMC) to pay hardship amount to the eligible depositors as per directions of RBI and subject to availability of liquidity with that bank.

To expedite the process, the authority for approving the payment under hardship grounds has also been delegated to the PMC Bank, states RBI reply in Delhi High Court.

Earlier, Delhi High Court had directed the Reserve Bank of India (RBI), Punjab Maharashtra Cooperative Bank and other respondents to consider the needs of the depositors during the coronavirus-induced lockdown. The RBI had capped the deposit withdrawal limit at Rs 40,000 and restricted the activities of the PMC Bank after an alleged fraud of Rs 4,355 crore came to light.

The Enforcement Directorate (ED) has seized and identified movable and immovable assets worth more than Rs 3,830 crore owned by HDIL in connection with the case.