PMC Depositors Protest at RBI in Delhi, Demand Full Withdrawal

New Delhi: Account holders in Punjab and Maharashtra Cooperative Bank (PMC) on Wednesday held a protest demonstration in front of the Reserve Bank of India (RBI) in Delhi. Demanding that RBI allow them to withdraw the full amount of money stuck in the bank, families of the affected victims who reportedly lost their lives after the scam unfolded, also took part in the protest rally, shouting slogans against the central government under Prime Minister Narendra Modi as well banking regulator RBI.

“The stuck money has led to a chain of alarming issues in function of daily lives, business operations, payment of statutory dues and applicable taxes. Our only demand is to allow the depositors to withdraw their money and save us from needless harassment, the delay is going to worsen the situation,” stated the depositors’ memorandum submitted to RBI. However, the Delhi officers of the central bank did not give any assurances to the protesters but said their appeal would be sent to the bank’s governor.

According to newspaper reports, 11 affected depositors, worried over losing their lifetime savings, reportedly died due to panic and heart attacks.

The protesting bank depositors also urged the RBI to give a public assurance that their hard-earned, tax-deducted, money was safe. “We request the RBI to revive the PMC Bank by infusing liquidity into it by merging it with another bank,” they appealed.

Since September 24, when the RBI first barred PMC Bank from regular business transactions for six months and restricted the withdrawal limit of the depositors to not more than Rs 1,000, worried depositors took to the streets and protested in front of all the 137 branches of the bank across states. Under pressure, the RBI has revised the withdrawal limit several times.

The crisis has roots in fraudulent transactions between infrastructure Company Housing Development Infrastructure Limited (HDIL) company and the PMC Bank. Reportedly, PMC Bank gave loans of over Rs 6,000 crore to HDIL fraudulently, which is now facing massive liquidity crisis.

While announcing the latest revision of withdrawal limit to Rs 50,000, on November 5, the RBI stated that more than 78% of the bank’s depositors would be able to withdraw their entire account balance.

With an estimated 17 lakh depositors, the RBI relaxations would have benefitted around 13,26,000 account holders, but the fate of remaining 3.74 lakh depositors, whose deposits range in some lakhs to crores, still hangs in balance.

At the Delhi protest, depositors from all the six branches of PMC Bank in Delhi have participated, drawing the RBI’s attention to the plight of hundreds of depositors whose survival would be in question if the government and RBI failed to resolve the crisis immediately.

Senior citizen Meena Devi, along with her husband, Ranjiv Singh, told Newsclick that all their life savings deposited with the bank’s Gautam Nagar branch were stuck now and the elderly couple was now struggling to meet thier medical expenses.

Numerous small-scale businesses in Chawri Bazar of Old Delhi are now shut due to the crisis, said another depositor, who took part in the protest.

Of the 12 directors of PMC Bank, eight are associated with the ruling Bharatiya Janata Party, said and angry Ashwini, a businessman based in Rajouri Garden. “Why have the scamster directors still not been arrested?” he said, adding that “the depositors are not even able to pay school fees, tax bills and monthly EMIs.”

Harmeet Singh, 28, whose Rs 15 lakh is stuck with PMC Bank wanted to know why the RBI failed to recognise the fraud all these years. “My savings money is stuck and my salary is not enough to pay my EMI bills,” Singh told Newsclick.

Analysts argue that the PMC Bank crisis can lead to a cascading effect wherein people might lose their hopes in the cooperative banking system and feel that the government should immediately bring in structural reforms in the banking system.

The Bombay High Court, while hearing multiple petitions on November 5, has ordered the RBI to file an affidavit on the steps taken to protect the interests of the depositors and posted the next hearing to November 19.

The Enforcement Directorate is currently probing the scam case an investigation under the Prevention of Money Laundering Act against HDIL, its promoters and PMC officials after the Economic Offences Wings (EoW) of Mumbai Police registered a case against them. PMC’s top officials Joy Thomas and Waryam Singh and HDIL promoters Rakesh and Sarang Wadhawan have been arrested in the case.