Mumbai: The only hope for the ‘ill-fated’ customers of the Punjab & Maharashtra Cooperative (PMC) bank is the state government as well as the Reserve Bank of India (RBI), claimed a former judge of the Bombay High Court.
The judge, who has had dealt with numerous financial disputes, during his stint at the HC, added both the government and the RBI have ‘special powers’ to intervene and resolve the issues of the customers.
Lakhs of customers — depositors and investors — of the PMC bank have no clue as to what would be the future course for them, as the RBI has imposed a restriction on their withdrawals.
The RBI has limited cash withdrawals to Rs10,000 in six months, an amount enhanced from the earlier Rs1,000 per six months.
Speaking with the Free Press Journal, Justice (retd) RMS Khandeparkar said if the authorities get into setting a liability and accountability of the errant bank officials, then the poor customers will have to wait for a minimum 3-4 years.
“Whenever there is a mismanagement of a financial institution the liability must be fixed. In terms of the legal process, it would be only after investigating who has committed the fraud in the bank. The next step would be filing an FIR against the errant officials followed by a full-fledged probe and trial,” Justice Khandeparkar said.
But, according to the former judge, the legal procedures may require the customers to wait indefinitely. “If you go strictly by all the legal steps, then it would take a long time. But, I am not saying one should not follow the law. Just that till the liabilities are set, the government must find an interim solution to help the customers,” Justice Khandeparkar said.
“The government must intervene for the sake of customers, as such cooperative banks are also under the regulation of the state,” the judge added.
Justice Khandeparkar wondered how some or the other cooperative banks are being shut down due to mismanagements despite being directly under the RBI control.
“Ultimately all banks are controlled by the RBI then how all this can happen at all. There must be a proper check and audit of such institutions, especially the cooperative banks. Some of them, we can see every day, almost getting locked up daily,” Justice Khandeparkar said, adding,
“It is distressing and unfortunate to see such issues, especially when the state and the RBI have direct control over the co-op banks. If such scams continue to take place, it directly points out at the failure of the authorities.”
According to Justice Khandeparkar, the RBI and the government can make use of their special powers and find out an interim solution to the issues of customers, at the same time let the probe part going on simultaneously.
“The authorities can resolve the issues by an interim solution such as appointing an administrator and by allowing the depositors to withdraw their amounts,” the judge pointed out.