Over eight people have died either of shock or stress emanating from the freezing of their savings in Punjab and Maharashtra Cooperative Bank (PMC Bank). It is hard not to be moved by the plight of those who have scrimped and saved for their sunset years, or to buy a home or pay for a child's education abroad, only to find that they have no access to their hard-earned, often tax-paid money.
At Moneylife Foundation, we have spent the last nine years telling people how cooperative banks fail with amazing regularity nearly one every month and it is best not to keep your savings there. We have also pointed out that the deposit insurance covers only Rs one lakh per depositor and that too comes long after the deposit is frozen. Unfortunately we are not able to reach all savers, who usually don't go beyond looking at the word 'bank' and assume it is as safe as a nationalized bank (where we the people repeatedly pay for the losses and recapitalization).
In the aftermath of the Reserve Bank of India (RBI) freezing deposit withdrawals, we discovered that some Moneylifers had also ignored our free advice and have money stuck in PMC Bank. That is truly unfortunate.
But, we couldn't remain indifferent and have plunged into helping those affected by the PMC Bank crisis to file a writ petition in the high court. It started with a public meeting organized by us, along with Centre for Financial Accountability (CFA) and Maharashtra State Bank Employees Federation (MSBEF) to understand PMC bank issues, demand answers from regulators and discuss the way forward including the legal option.
We made considerable headway only because of the extraordinary planning of Senior Advocate Murali Neelakantan has worked tirelessly, all through the Diwali holiday, to put together an excellent petition, which will be filed shortly. With his help we hope to have the support of a network of brilliant legal minds, who have agreed to help on a pro bono basis. It is too early to mention names now, but if the court is willing to entertain the writ and give it the hearing it deserves, we will come back to you.
We think we have done our best the rest is up to the courts, karma and the prayers of depositors. You can read more about this public meeting in our programmes conducted section below and also find links to the coverage as well the video.
Moneylife Foundation has volunteered to pay the initial expenses while the lawyers have all agreed to work free for the cause. But the work and the costs are both huge so we can only do as much as our resources permit. At the moment we have stopped collecting documents for the legal matter, but we will keep you posted as things develop. You can always write to us at [email protected] or [email protected] for details.
Aside from the writ petition, Moneylife Foundation is working hard at persuading the government to work at an effective resolution plan. We have contacted several ministers, we have met the RBI Governor, Mr Shaktikanta Das, who was kind enough to give our trustees a patient hearing on 15th October. We have submitted a memorandum to the RBI and have followed it up with meetings with some of the best known names in the financial world, including retired central bankers and bank chairmen (many want to remain unnamed) to figure out the way forward.
Is a resolution possible? Yes, indeed it is but not because the bank has a big stash of land that can be easily auctioned to raise money. That seems like dangerous puffery and unfortunately it is coming from government agencies. The resolution will be tough, require a lot of support from the government and the RBI and can be pulled off only by a super smart administrator with strong linkages across the financial world.
We hope the government sees the wisdom in doing this and also moves towards better regulation of the 1900+ cooperative banks in India, which need to be converted into commercial banks or small finance banks, with RBI as the single regulator who is also made more accountable through statutory changes.
We will share more details and updates on PMC Bank as things develop. Meanwhile please read our extensive coverage of the PMC Bank issue here
You can also watch some of our videos on the subject here On another note, Moneylife Foundation will soon turn 10 (in February 2020). This is the time for us to introspect on all the things we did in the past decade and re-focus our energies on issues and challenges in the coming decade.
The next 10 years are going to be challenging in many ways we need to have fresh thinking on our money, savings and regulation, but also on environment, health and medicare, justice and equality, privacy vs transparency and how information technology and artificial intelligence is disrupting the world as we know it.
Do write to me with your thoughts and inputs on things we should be doing in the next decade or doing differently.
On Wednesday November 6, Indian Express journalist Vishwas Waghmode will be presenting a brief talk on How to Make the Monday Inspections under the RTI Act work for you. The session will be held in our Knowledge Centre from 5:30 - 7:00pm. Please do register if you would like to attend.
In the coming months, we shall be conducting more RTI events in Schools, Colleges and other Organisations. If you think such RTI workshops could be of use to your educational institution or organistaion, please do write to us at [email protected]. We conduct these sessions at absolutely no cost to your organisation and only ask that you provide us with access to your auditorium or conference hall and gather a group of at least 100 people.
Programmes in October
The PMC Bank Crisis - Public Meeting was held on October 12, at the Indian Merchants' Chamber with attendance from over 300 affected and concerned depositors. We had a panel comprising of Girish Kuber, Editor at Loksatta, Advocate S Balakrishnan, Devidas Tuljapurkar, General Secretary of MSBEF and Priya Dharshini, senior research associate with CFA.
After hearing thoughts from each panelist, a few members of the audience were given an opportunity to express their concerns and their perspective on how the crisis can be resolved.
Advocate Neelankantan who was also present at the event, urged those affected to connect with Moneylife Foundation to file a writ petition. A brief write up of the session can be found here and you can also watch the video on our YouTube Channel.
We also conducted a RTI workshop for the students of New Law College, with the assistance of retired Central Information Commissioner, Shailesh Gandhi. Since the college was also the Academic Partner for our 2nd Annual RTI Lecture, we also rewarded those students who had attended Justice Hegde's lecture with participating certificates. As always, a video of this session has been uploaded to our YouTube Channel and you can watch the same here.
If you are in Mumbai, please take advantage of the opportunity to come and learn from our experts, whether it be from Daily Counseling Sessions or from our occasional events. If you are not located in Mumbai, you can still take advantage of our sessions by watching them live on Facebook and of course on our YouTube Channel where a video recording is published a few days after the event.
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Thank you for your support and look forward to your good wishes always.
Founder-Trustee, Moneylife Foundation
Trustees: TS Krishnamurthy, Dr KC Chakrabarty, Walter Vieira, Sucheta Dalal, Debashis Basu and Dr Anupam Saraph.
Moneylife Foundation is registered with the Charity Commissioner of Mumbai, is an Affiliate member of OECD's International Network on Financial Education, is a Supporter Member of Consumers International, Development Partner of Advocates for International Development (A4ID), and is a winner of the 10th MR Pai Memorial Award.
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