Misra told the court that PMC Bank depositors across the country are grappling with financial hardships.
The Delhi High Court on Friday asked the Centre, the RBI and others to file response plea seeking directions for redressal of certain aspects, including insuring depositors' money blocked in the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank and to frame guidelines to safeguard deposited money.
A Division Bench of Chief Justice D.N. Patel and Justice C. Hari Shankar issued a notice to the Centre and RBI listing the matter for further hearing on January 22.
The court was hearing a public suit filed by Delhi-based social activist Bejon Kumar Misra who has sought to regulate the banks and to constitute a high-powered committee for looking into the complete affairs of the working of co-operative banks.
"The spectacle of..devastating situation poses serious questions on the institutional efficacy of the respondents for the purpose of protection of the common man in conformity to the constitutional obligations and statutory requirement," Bejon Kumar Misra said in his plea.
"It is imperatively mentioned that our country has minimum governance on the banking sector leading to numerous scams and host of financial syndicates are taking advantage of the lacunas and loopholes in the existing laws and formulated regulations, pressuring the common people to part away with their hard-earned financial resources to the dishonest manipulators without having adequate information and knowledge," he said.
He has also sought for a 100 per cent insurance coverage of the money deposited in various co-operative banks including nationalised banks pointing out that the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India (RBI), does not provide for 100 per cent insurance to all types of deposits such as saving deposits.
The petitioner also said that the "most glaring lacuna in the insurance cover in the banking is the limit of insurance is capped at Rs 1,00,000 only for both principal and interest and this policy has been for the last 26 years."
Bejon Kumar Misra, thus, pleaded before the court to issue an appropriate direction to the RBI to provide complete financial insurance as per the respective deposits of the depositors, unlike the existing insurance cover for Rs 1,000,00 only irrespective of the deposit amount.
Bejon Kumar Misra told the court that PMC Bank depositors across the country are grappling with financial hardships on account of the restriction imposed by the RBI on the withdrawal of their own money.
Last month, the RBI had imposed regulatory restrictions on PMC Bank under the provisions of the Banking Regulation Act.
Bejon Kumar Misra had moved the Supreme Court challenging the RBI notification but the top court asked him to approach the High Court for redressal on the matter.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)