Failure of PMC Bank and severe distress caused to common people.

The failure of PMC Bank has put most of its customers in severe distress. Many have lost their life time savings. Dreams of very many account holders have been shattered which have not been addressed at all. One of the account holders has lost life now. There is no redressal in sight.

This bank's failure is forcing many of us to start rethinking if our hard earned money is at all safe in Banks. The common man is the worst sufferer in this. The Directors, Board members and other rich and mighty do not get affected as they are in the know of things and take their actions well in advance and take out the money from such failing banks. We are hearing every now and then about loan waivers of renowned people and banking scams increasing by the day. Again the worst sufferer is the common man whose interests are not being addressed by any agency. The only meager compensation from the DICGC (Deposit Insurance & Credit Guarantee Corporation) is Rs 1 lakh per account holder to cover the Principal and Interest. Also, in the past in most of the failures even this small amount has been delayed to the people by many years.

A loss in confidence by the common person in banking will discourage him/ her and drive him away from Banks, both big and small. Can this be afforded? Not the least, as this can lead to more similar failures.

This Petition to the Hon’ble Finance Minister of India is to request following so that the interests of common persons are taken care-of: -

1. To immediately increase the existing limit of DICGC cover to Rs 50 Lakh (it is understood that this limit is much higher in other developing and developed countries; USA guarantees USD 1 lakh per account, which is more than INR 71 Lakh at the current rate of conversion).

2. In the unlikely event of a bank’s failure, the lockers should be immune and should be operable freely by the locker holders.

3. All the co-operative banks in India should be answerable to the RBI and necessary controls and audits must happen regularly as for other commercial banks.

4. In the event when DICGC amounts are payable, the claims must be settled and amounts disbursed with-in a reasonable time say 3 (three) months.

5. Exposure of banks to only select customers and companies not to exceed certain reasonable limits. PMC bank is understood to have had very large exposure to few real estate companies, who brought the bank down.

6. The people who are responsible for creating bad debts and NPAs for the banks should be charged with criminal cases and recovery made by attachment/ auction of their personal and company assets. All necessary laws should be amended and new legislation brought-in. A speedy action is requested. These people should not be allowed to leave the country by impounding of their passports. Such severe actions will be lessons for others and should help in eliminating the rut.
The common people MUST be kept in mind please.