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PIL in Bombay HC seeking to quash RBI's directions imposing restrictions on PMC bank

Mumbai (Maharashtra) [India], Sept 30 (ANI): A public interest litigation (PIL) was filed in the Bombay High Court seeking to quash the RBI directions imposing withdrawal limits on account holders in Punjab and Maharashtra Cooperation (PMC) bank.

The matter will be mentioned before the Chief Justice of Bombay High Court on Tuesday.

The PIL was filed in the court by a consumer body named Consumer Action Network (CAN) after the continued protests in the city against the RBI's move to impose a withdrawal limit of Rs 10,000 for six months.

The plea sought the court's direction to quash the directions dated September 23 and September 26 by the RBI imposing a restriction on withdrawal limits of Rs 10,000 for six months.

It also sought directions to concerned authorities to strengthen banking regulatory laws by framing stringent rules and regulation so as to avoid similar instances whereby public money cannot be misappropriated and to strengthen and stabilize economic development.

CAN, in its plea, also sought directions so an RBI Committee of Experts comprising of Finance, Audit, Account, and Technology any other finance branch can be constituted so that the situations of misappropriation of the public fund can be immediately indicated and dealt with.

The plea also prayed that the court issue writ, direction or order to the RBI to make special arrangements in nature of relief measures to grant relief to lakhs of account holders and depositors of the bank.

The suspended MD of the bank had, on Saturday, also admitted that the bank did not report the financial exposure to the RBI for over six years.

Last week, the Reserve Bank of India (RBI) had increased the withdrawal limit from Rs 1,000 to 10,000 after several account holders gathered outside the Sion branch of the bank in Mumbai.

The central bank had restricted activities of PMC Bank for six months capping the withdrawals at Rs 1,000 per account and asked the bank to not grant or renew any loans and advances, make any investment or incur any liability, including borrowing of funds and acceptance of deposits.

The RBI has also sacked the bank's board of directors under sub-sections 1 and 2 of Section 36 AAA read with Section 56 of the Banking Regulation Act 1949. (ANI)