Depositors of the crisis-hit Punjab and Maharashtra Cooperative Bank can approach the Reserve Bank-appointed administrator for withdrawal up to Rs 1 lakh in case of medical emergencies, the RBI told the Bombay High Court on Tuesday.In an affidavit filed in the HC in response to petitions challenging the fund withdrawal restrictions,the RBI has mentioned the withdrawal ceiling at Rs 50,000 for scenarios like marriage,education,livelihood and “other hardships”.
A bench of Justices Satyaranjan Dharmadhikari and Riyaz Chagla was told by senior advocate Venkatesh Dhond,representing the banking regulator,that they will have to approach the RBI-appointed administrator.
RBI’s response was to petitions challenging its restrictions on withdrawals.On September 23, it imposed a cap on withdrawals to Rs 1,000 per depositor for six months,which it gradually hiked. Dhond said now the ceiling is capped at Rs 50,000 and ensures 75-80% depositors will recover their deposits in full.
RBI’s affidavit stated, “To mitigate the hardships of depositors, the Reserve Bank has also enabled entertaining on merit any application for withdrawal beyond the stipulated amount on hardship grounds like medical treatment, marriage, education, livelihood and other hardships, subject to a ceiling of Rs 1 lakh on medical ground and sub-ceiling of Rs 50,000 in all other cases.”
Dhond said the “entire mess” is being investigated. “An administrator is appointed. Once the picture emerges of the correct nature of the solvency of the bank, the ceiling will be increased.The process is dynamic and not one time.” He urged the court not to interfere with the restrictions,saying there will be a run on the bank and its operations will be jeopardised.
RBI’s reply said it acted on an insider tip-off to look into the large-scale wrongdoings linked to HDIL which was extended credit facilities in violation of prudent banking. Dhond cited inability to share RBI’s probes publicly saying it will hamper police investigation. He offered to submit it to the court in a sealed cover. The court posted the next hearing to December 4.